You are in the process of preparing the journal entries for Sailwork Services. Total sales revenue information for the year included credit sales of $270,000 and cash sales of $30,000. Sailwork Services uses the allowance method to measure bad debts.

Collections on account during the year were $260,000 and $500 of specific accounts receivable were identified as never being collectible as the customer had filed for bankruptcy.

Sailwork began the current year with an account receivable debit balance of $30,500 and an allowance for doubtful accounts debit balance of $100. The accounts receivable sub-ledger reveals the following aging at the end of the year:

Aged Accounts Receivable

0-30 days 31-60 days 61-90 days >90 days Total

A/R subtotals $17,000 $4,000 $2,400 $16,600 $40,000

Estimated % uncollectible 1% 2% 8% 40%

1) Record the following journal entries for the year (explanations are not required):

1. All sales for the year (1 Mark)

2. Collection of account receivables (1 Mark)

3. Bad debt expense using the percent of sales method based on 2.5% of credit sales were uncollectable. (2 Marks)

4. Bad debt expense assuming the aging-of-receivables method was used instead of the percent of sales method. (2 Marks)

5. A/R from High Risk Corporation in the amount of $50 is determined not to be collectible. (1 Mark)