During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $135,000, of which $67,500 was on credit. At the start of 2021, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $530 credit balance. Collections of accounts receivable during 2021 amounted to $61,000. Data during 2021 follow: a. On December 10, a customer balance of $1,150 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of cr sales for the year. Required: 1. Give the required journal entries for the two events in December. 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement. 2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Req 3 Show how the amounts related to Accounts Receivable would be reported on the balance sheet. Kelly's Camera Shop Balance Sheet (partial) At December 31, 2021
During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $135,000, of which $67,500 was on credit. At the start of 2021, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $530 credit balance. Collections of accounts receivable during 2021 amounted to $61,000. Data during 2021 follow: a. On December 10, a customer balance of $1,150 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of cr sales for the year. Required: 1. Give the required journal entries for the two events in December. 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement. 2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Req 3 Show how the amounts related to Accounts Receivable would be reported on the balance sheet. Kelly's Camera Shop Balance Sheet (partial) At December 31, 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Just answer part 2B
Transcribed Image Text:During the year ended December 31, 2021, Kelly’s Camera Shop had sales revenue of $135,000, of which $67,500 was on credit. At the start of 2021, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $530 credit balance. Collections of accounts receivable during 2021 amounted to $61,000.
Data during 2021 follow:
a. On December 10, a customer balance of $1,150 from a prior year was determined to be uncollectible, so it was written off.
b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year.
**Required:**
1. Give the required journal entries for the two events in December.
2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement.
2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet.
3. On the basis of the data available, does the 2 percent rate appear to be reasonable?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
Req 3
Show how the amounts related to Accounts Receivable would be reported on the balance sheet.
Kelly's Camera Shop
Balance Sheet (partial)
At December 31, 2021
Current Assets
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