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The following information is available for Fess Company: Credit sales during 20X1 $ 150,000 Allowance for credit losses at December 31, 20X0 1,450 Accounts receivable
The following information is available for Fess Company:
Credit sales during 20X1 | $ | 150,000 | |
Allowance for credit losses at December 31, 20X0 | 1,450 | ||
Accounts receivable deemed worthless and written off during 20X1 | 1,800 | ||
During 20X1, Fess estimated that its credit loss expense should be 1% of all credit sales.
As a result of a review and aging of accounts receivable in early January 20X2, it has been determined that an allowance for credit losses of $1,600 is needed at December 31, 20X1.
Required:
- What is the total amount that Fess should record as credit loss expense for the year ended December 31, 20X1?
- Show the journal entries affecting the Allowance for credit losses that Fess made during 20X1.
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