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The September 30, 2020, records of Dakota Auto Supply include these accounts. Accounts Receivable Allowance for Doubtful Accounts. Bad Debt Expense...... $ 275,000 (9,200) 8,000
The September 30, 2020, records of Dakota Auto Supply include these accounts. Accounts Receivable Allowance for Doubtful Accounts. Bad Debt Expense...... $ 275,000 (9,200) 8,000 During the last quarter of 2020, Dakota completed the following selected transactions: Nov. 22 Nov. 30 Dec. 1 Dec. 31 Wrote off the following account receivable as uncollectible: Blocker, Inc., $ 4,100 Sold $9,000 of inventory to a customer for $17,500 and accepted a credit card for payment. Dakota is charged a 3% fee on credit card transactions. Signed a note from a customer that converted a $15,000 account receivable into a note receivable with an 12% annual interest rate. Record Sales Revenue on Account of $400,000 for the quarter. The cost of inventory sold was $230,000. Record the necessary bad debt expense adjustment. During the year Dakota estimates expense at 3.5% of credit sales. Record the collection of $375,000 from customers on Account for the quarter Record the interest earned on the note receivable Dec. 31 Dec. 31 Dec. 31 Required 1. Determine how each transaction effects the Balance Sheet and Income Statement Accounts 2. Show how Dakota Auto Supply will report its receivables in a comparative balance sheet for 2020 and 2019. At December 31, 2019, the company's Accounts Receivable balance was $280,000 and Allowance for Doubtful Accounts stood at $ 10,000. No notes receivable had been outstanding at 12/31/2019
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