The following information is extracted from the accounting records of the Shelton Corporation at the beginning of 2007: Accounts Receivable Allowance for Doubtful Accounts $63,000 1,400 (credit) During 2007, sales on credit amounted to $575,000, $557,400 was collected on outstanding receivables, and $2,600 of receivables were written off as uncollectible. On December 31, 2007, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Shelton's estimate of bad debt expense for 2007. 2. Prepare the Accounts Receivable section of Shelton's December 31, 2007 balance sheet. 3. Compute Shelton's receivables turnover.
The following information is extracted from the accounting records of the Shelton Corporation at the beginning of 2007: Accounts Receivable Allowance for Doubtful Accounts $63,000 1,400 (credit) During 2007, sales on credit amounted to $575,000, $557,400 was collected on outstanding receivables, and $2,600 of receivables were written off as uncollectible. On December 31, 2007, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Shelton's estimate of bad debt expense for 2007. 2. Prepare the Accounts Receivable section of Shelton's December 31, 2007 balance sheet. 3. Compute Shelton's receivables turnover.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following information is extracted from the accounting records of the Shelton Corporation at
the beginning of 2007:
Accounts Receivable
Allowance for Doubtful Accounts
$63,000
1,400 (credit)
During 2007, sales on credit amounted to $575,000, $557,400 was collected on outstanding
receivables, and $2,600 of receivables were written off as uncollectible. On December 31, 2007,
Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance.
Required:
1. Prepare the journal entry necessary to record Shelton's estimate of bad debt expense for 2007.
2. Prepare the Accounts Receivable section of Shelton's December 31, 2007 balance sheet.
3. Compute Shelton's receivables turnover.
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