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Use the following information for the next problems: At January 1, 2018, HF Products had Accounts Receivable of $28,000, and Allowance for Bad Debts had
Use the following information for the next problems: At January 1, 2018, HF Products had Accounts Receivable of $28,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, HF recorded the following: a Sales of $185,000 ($164,000 on account, $21,000 for cash). Ignore Cost of Goods Sold. b Collections on account, $135,000. c Write-offs of uncollectible receivables, $2,300. Part A Requirement - Journalize HF's transactions that occurred during 2018 Date Account Names Debit Credit d. Calculate HF's bad debts expense assuming HF estimates bad debts as 3% of credit sales (Percent of Sales method) (show work) T-Accounts (optional) Accounts Receivable Allowance for Bad Debts Requirement - Calculate HF's allowance for bad debts expense assuming HF estimates bad debts as 10% of accounts receivable (Percent of Receivables method). Allowance (show work) Part C (Aging of Receivables) Requirement - Calculate HF's bad debts expense assuming HF estimates bad debts using the Aging of Receivables method and the aging presented below. 1 1 - 30 31 -60 Days Days $ 65,000 $ 50,000 Age of Accounts Receivable 61-90 Over 90 Total Receivables Days Days $ 40,000 $ 45,000 $200,000 0.4% 3.0% 5.0% 48.0% Accounts Receivable Percent uncollectible Estimated total bad debts Total Allowance
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