P8-37B Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet Dialex Watches completed the following selected transactions during 2018 and 2019: 2018 Dec. 31 Estimated that bad debts expense for the year was 3% of credit sales of $410,000 and recorded that amount as expense. The company uses the allowance method. 31 Made the closing entry for bad debts expense. 2019 Jan. 17 Sold merchandise inventory to Marty White, $400, on account. Ignore Cost of Goods Sold. Jun. 29 Wrote off Marty White's account as uncollectible after repeated efforts to collect from him. Aug. 6 Received $400 from Marty White, along with a letter apologizing for being so late. Reinstated White's account in full and recorded the cash receipt. Dec. 31 Made a compound entry to write off the following accounts as uncollectible: Barry Krisp, $1,600; Maria Bryant, $1,100; and Richard Renik, $400. 31 Estimated that bad debts expense for the year was 3% on credit sales of $490,000 and recorded the expense. 31 Made the closing entry for bad debts expense. Requirements 1. Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assum- ing the accounts begin with a zero balance. Record the transactions in the general journal (omit explanations), and post to the two T-accounts. 2. Assume the December 31, 2019, balance of Accounts Receivable is $136,000. Show how net accounts receivable would be reported on the balance sheet at that date. P8-37B Requirement 1 Accounts and Explanation Debit Credit Date 2018 Dec. 31 31 2019 Jan. 17 Jun. 29 Aug. 6 6 Dec. 31 31 Allowance for Bad Debts 0 Beginning Bal. Bad Debts Expense 0 Beginning Bal. Requirement 2 DIALEX WATCHES OPE Paragraph 1 2 3 5 Requirement 2 DIALEX WATCHES Balance Sheet-Partial December 31, 2019 Assets Current Assets: Accounts Receivable Less: Allowance for Bad Debts