Hardy's Landscape Service's total revenue on account for 2018 amounted to $273,205. The company, which uses the allowances method, estimates bad debts at 1/2 percent of total revenue on account. Required: Journalize the following selected entries: 2012 Dec. 12 Record services performed on account for E.E. Morton, $245. Dec. 31 Record the adjusting entry for Bad Debts Expense. Dec. 31 Record the closing entry for Bad Debts Expense. 2013 Feb. 18 Write off the account of E.E. Morton as uncollectible, $245.
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.
Hardy's Landscape Service's total revenue on account for 2018 amounted to $273,205. The company, which uses the allowances method, estimates
Required:
Journalize the following selected entries:
2012
Dec. 12 Record services performed on account for E.E. Morton, $245.
Dec. 31 Record the
Dec. 31 Record the closing entry for Bad Debts Expense.
2013
Feb. 18 Write off the account of E.E. Morton as uncollectible, $245.
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