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QUESTION 2 On January 1, 2021, Hilly Mountain Flagpoles had Accounts Receivable debit balance of $31,000, and Allowance for Bad Debts had a credit balance
QUESTION 2 On January 1, 2021, Hilly Mountain Flagpoles had Accounts Receivable debit balance of $31,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year 2021, Hilly Mountain Flagpoles recorded the following: Sales of $174,000 ($157,000 on account: $17,000 for cash). Ignore Cost of Goods Sold. Collections on account, $131,000. Write-offs of uncollectible receivables, $2,200. (c) (i) Journalize Hilly's adjustment to record bad debts expense assuming Hilly estimates bad debts as 3% of accounts receivable. (4 marks) (ii)Post the adjustment to the Allowance for Bad Debts and Bad Debts Expense T- accounts. (8 marks)
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