Assume That This Company's Bad Debts Are Estimated and Recorded

Essay

Assume that this company's bad debts are estimated and recorded as 1.5% of credit sales.
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).
a.Show how accounts receivable and the allowance for doubtful accounts would appear on the balance sheet after adjustment.
b.Prepare the entry to write off a $1,500 account receivable on January 1 of the next year.
c.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.