E9-17 Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet Requirements 1. Journalize Hilly's transactions that occurred during 2016. The company uses the allowance method. 2. Post Hilly's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. 3. Journalize Hilly's adjustment to record bad debts expense assuming Hilly estimate= bad debts as 4% of credit sales. Post the adjustment to the appropriate T-accounts. 4. Show how Hilly Mountain Flagpoles will report net accounts receivable on its December 31, 2016. balance sheet.
E9-17 Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet Requirements 1. Journalize Hilly's transactions that occurred during 2016. The company uses the allowance method. 2. Post Hilly's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. 3. Journalize Hilly's adjustment to record bad debts expense assuming Hilly estimate= bad debts as 4% of credit sales. Post the adjustment to the appropriate T-accounts. 4. Show how Hilly Mountain Flagpoles will report net accounts receivable on its December 31, 2016. balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
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Transcribed Image Text:Use the following information to answer Exercises E9-17 and E9-18.
At January 1, 2016, Hilly Mountain Flagpoles had Accounts Receivable of $31,000,
and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilly
Mountain Flagpoles recorded the following:
a. Sales of $174,000 ($157,000 on account; $17,000 for cash). Ignore Cost of
Goods Sold.
b. Collections on account, $131,000.
c. Write-offs of uncollectible receivables, $2,200.
E9-17 Accounting for uncollectible accounts using the allowance method
(percent-of-sales) and reporting receivables on the balance sheet
Requirements
1. Journalize Hilly's transactions that occurred during 2016. The company uses the
allowance method.
2. Post Hilly's transactions to the Accounts Receivable and Allowance for Bad Debts
T-accounts.
3. Journalize Hilly's adjustment to record bad debts expense assuming Hilly estimates
bad debts as 4% of credit sales. Post the adjustment to the appropriate T-accounts.
4. Show how Hilly Mountain Flagpoles will report net accounts receivable on its
December 31, 2016, balance sheet.
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