Prepare journal entries to record write-off of receivables

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Reference no: EM131289296

Sally's Surf Company offers credit terms to its customers. At the end of 2016, accounts receivable totaled $680,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $43,000 at the beginning of 2016 and $26,500 in receivables were written off during the year as uncollectible. Also, $2,300 in cash was received in December from a customer whose account previously had been written off. The company estimates bad debts by applying a percentage of 10% to accounts receivable at the end of the year.

Required:

1. Prepare journal entries to record the write-off of receivables, the collection of $2,300 for previously written off receivables, and the year-end adjusting entry for bad debt expense.

2. How would accounts receivable be shown in the 2016 year-end balance sheet?

Reference no: EM131289296

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