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 uncollectible to be 5% of January Credit sales, $4500. 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 allowing using the percent of sales method for January credit sales.

2. Journalize the entry to record the write off of the customers bad debt.