On December 31,of the Current Year,a Company's Unadjusted Trial Balance

Essay

On December 31,of the current year,a company's unadjusted trial balance revealed the following:
Accounts receivable of $185,600; Sales Revenue of $1,280,000; (75% were on credit),and Allowance for Doubtful Accounts of $1,600 (credit balance).
Prepare the adjusting journal entry to record the estimate for bad debts assuming:
1.6.0% of the accounts receivable balance is assumed to be uncollectible.
2.Bad debts expense is estimated to be 1.5% of credit sales.
3.Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet after adjustment.
4.Prepare the entry to write off a $1,500 account receivable on January 1 of the next year.
5.Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet immediately after writing off the account in part 2.