The following information is available for Fess Company: Credit sales during 2014 $150,000 Allowance for doubtful accounts

Question:

The following information is available for Fess Company:
Credit sales during 2014 $150,000
Allowance for doubtful accounts at December 31, 2013 1,450
Accounts receivable deemed worthless and written off during 2014 1,800
During 2014, Fess estimated that its provision for bad debts should be 1% of all credit sales.

As a result of a review and aging of in early January 2015, it has been determined that an allowance for doubtful accounts of $1,600 is needed at December 31, 2014.

Required:
1. What is the total amount that Fess should record as provision for bad debts for the year ended December 31, 2014?
2. Show the journal entries affecting the Allowance for doubtful accounts that Fess made during 2014.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...