Q2- Expand Furniture Store has credit sales of $400,000 in 2016 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2016, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7,000 will prove to be uncollectible. On March 4, 2017, the credit manager authorizes a write-off of the $1,200 balance owed by Ahmad Instructions (a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2016. (b) Show the balance sheet presentation of accounts receivable on December 31, 2016. (c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000. Make the appropriate entry to record the write-off of the Ahmad account. Also show the balance sheet presentation of accounts receivable before and after the write-off.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Q2- Expand Furniture Store has credit sales of $400,000 in 2016 and a debit balance of $600 in
the Allowance for Doubtful Accounts at year end. As of December 31, 2016, $130,000 of accounts
receivable remain uncollected. The credit manager prepared an aging schedule of accounts
receivable and estimates that $7,000 will prove to be uncollectible.
On March 4, 2017, the credit manager authorizes a write-off of the $1,200 balance owed by Ahmad
Instructions
(a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2016.
(b) Show the balance sheet presentation of accounts receivable on December 31, 2016.
(c) On March 4, before the write-off, assume the balance of Accounts Receivable account is
$160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000. Make
the appropriate entry to record the write-off of the Ahmad account. Also show the balance
sheet presentation of accounts receivable before and after the write-off.
Transcribed Image Text:Q2- Expand Furniture Store has credit sales of $400,000 in 2016 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2016, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7,000 will prove to be uncollectible. On March 4, 2017, the credit manager authorizes a write-off of the $1,200 balance owed by Ahmad Instructions (a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2016. (b) Show the balance sheet presentation of accounts receivable on December 31, 2016. (c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000. Make the appropriate entry to record the write-off of the Ahmad account. Also show the balance sheet presentation of accounts receivable before and after the write-off.
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