During its first year of operations, Precious Cargo, Inc. had sales of $461,000,

Question

During its first year of operations, Precious Cargo, Inc. had sales of $461,000, all on account. Industry experience suggests that Precious Cargo's uncollectibles will amount to 1% of credit sales. At December 31, 2016, accounts receivable total S53.000. The company uses the allowance method to account for uncollectibles. (Assume that there are no expected sales refunds or sales returns for this exercise.) 1. 2. Make Precious Cargo's journal entry for uncollectible-account expense using the percent-of-sales method Show how Precious Cargo should report accounts receivable on its balance sheet at December 31, 2016. 1. Make Precious Cargo's journal entry for uncollectible-account expense using the percent-of-sales method. (Record debits first, then credits. Exclude explanations from journal entries.) Journal Entry Date Accounts Debit Credit Dec 31 2. Show how Precious Cargo should report accounts receivable on its balance sheet at December 31, 2016. Less: Choose from any list or enter any number in the input fields and then continue to the next question.

Explanation / Answer

1. Bad Debt expense a/c Dr 4,610

To allowance for doubtful debts a/c Cr 4,610

2. Accounts Receivable 53,000

Less: Allowance for doubtful debts   4,610

Net Accounts Receivable    48,390

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.