- Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible.
Using the percentage of sales method:
Determine the amount to be charged to the uncollectible expense account.
Prepare the Allowance for uncollectible account.
Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31.
Extracted text: Allowance for uncollective Accounts Date Particulars Amount Date Particulars Amount 15 May Accounts Receivable 2,900 1 Jan Balance b/d 31,200 4 Aug Accounts Receivable 3,300 26 Oct Account Receivable 120 31 Dec Balance c/d 116,500 31 Dec Bad Debt 91,380 Balance c/d 116,500 Total 122,700 Total 122,700 Accounts receivable Date Particulars Amount Date Particulars Amount but allowance for 1 Jan To Balance b/d 312,000 15 May 2,900 uncollectible by allowance for 10 Jan to sales Revenue 11,000 4 August 3,300 uncollectible 26 Oct To Allowance for uncollectible account 120 26 Oct by cash 120 31 Dec by balance c/d 316,800 Total 122,700 Total 122,700
Extracted text: Current Assets: Total Receivable 316,800 Less: Allowance for uncollectible 116,500 Net Trade receivable 200,300