Essay
Stiller Company uses the allowance method to account for bad debts.
In the first year of operations (2014),Stiller sold $540,000 of merchandise on credit,including a $2,500 sale to Bubba Long.On December 31,2014,it provided an addition to its allowance for doubtful accounts equal to 1.8% of its credit sales.On June 1,2015,Stiller wrote off as uncollectible the $2,500 account of Bubba Long; and on December 25,2015 Bubba Long unexpectedly paid his account in full.
Prepare the journal entries that Stiller Company should make:
(a)On December 31,2014,to increase the allowance for doubtful accounts.
(b)On June 1,2015,to write off the bad debt.
(c)On December 25,2015,to record the unexpected collection from Bubba Long.
Correct Answer:
Verified
Correct Answer:
Verified
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