P9-41 Accounting for uncollectible accounts using the allowance method This problem continues the Davis Consulting situation from Problem P8-33 of Chapter 8. Davis reviewed the receivables list from the January transactions. Davis uses the allowance method for receivables, estimating uncollectibles to be 5% of January credit sales, $4,500. Davis identified on February 15 that a customer was not going to pay his receivable of $200. Requirements 1. Journalize the January 31 entry to record and establish the allowance using the percent-of-sales method for January credit sales. 2. Journalize the entry to record the write-off of the customer?s bad debt.

Requirements 1 and 2 January Credit sales are $4,500 remember to do your calculation for uncollectibles Date 2015 Jan. 31 Accounts and Explanation Feb. 15 Available accounts for journal entries: Bad Debts Expense Allowance for Bad Debts Allowance for Bad Debts Accounts Receivable Debit Credit