Essay
A company that uses the allowance method to account for its bad debts had credit sales of $740,000 in 2015,including a $720 sale to Arbor Corporation.On December 31,2015,the company estimated its bad debts at 1.5% of its credit sales.On June 1,2016,the company wrote off as uncollectible the $720 account of Arbor Corporation; and on December 21,2016,Arbor Corporation unexpectedly paid her account in full.
Required:
Prepare the necessary journal entries dated: (a)on December 31,2015,to reflect the estimate of Bad Debt Expense; (b)on June 1,2016,to write off the bad debt; and (c)on December 21,2016,to record the unexpected collection.
Correct Answer:
Verified
Correct Answer:
Verified
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