Response:
1. Create all necessary journal entries concerning uncollectible accounts and bad debt expense.
1
Dr Bad debt expense_______ 3320
Cr Allowance for bad debt_________________ 3320
2
Dr Allowance for bad debt__ 430
Cr Account Receivable_____________________ 430
2. Provide the year-end balance sheet display for accounts receivable.
Accounts receivable__________47570
Net accounts receivable_______44250
Clarification:
Credit transactions 166000
Credit transactions 118000
Bad debt losses are 2%
Written off 430
Allowance 3320
1
Dr Bad debt expense_______ 3320
Cr Allowance for bad debt_________________ 3320
2
Dr Allowance for bad debt__ 430
Cr Account Receivable_____________________ 430
Year-end balance___________48000
Cr Account Receivable_________430
Accounts receivable__________47570
Allowance for bad debts_______3320
Net accounts receivable_______44250