During Burns Company's first year of operations, credit sales totaled $180,000 and collections on credit sales totaled $125,000. Burns estimates that bad debt losses will be 1.0% of credit sales. By year-end, Burns had written off $500 of specific accounts as uncollectible. Required: Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. Show the year-end balance sheet presentation for accounts receivable.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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During Burns Company's first year of operations, credit sales totaled $180,000 and collections on credit sales totaled $125,000. Burns estimates that bad debt losses will be 1.0% of credit sales. By year-end, Burns had written off $500 of specific accounts as uncollectible.

Required:

  1. Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense.
  2. Show the year-end balance sheet presentation for accounts receivable.

 

 

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