The income statement approach to estimating uncollectible accounts expense is used by Burgess Wholesale. On March 31 the firm had accounts receivable in the amovnt of $630,000. The Allowance for Doubtful Accounts had a credit balance of $3,950. The controller estimated that uncollectible accounts expense would amount to one-half of 1% of the $5,200,000 of net sales made during March. This estimate was entered in the accounts by an adjusting entry on March 31. On April 12, an account receivable from Conrad Stern of $3,110 was deter- mined to be worthless and was written off. However, on April 24, Stern won several thousand dollars on a TV game show and immediately paid the $3,110 past-due EXERCISE 8-3 Accounting for Uncollectible Accounts-The "Income State- ment" Method account. INSTRUCTIONS Prepare four journal entries in general journal form to record the above events.

The income statement approach to estimating uncollectible accounts expense is used by Burgess Wholesale. On March 31 the firm had accounts receivable in the amovnt of $630,000. The Allowance for Doubtful Accounts had a credit balance of $3,950. The controller estimated that uncollectible accounts expense would amount to one-half of 1% of the $5,200,000 of net sales made during March. This estimate was entered in the accounts by an adjusting entry on March 31. On April 12, an account receivable from Conrad Stern of $3,110 was deter- mined to be worthless and was written off. However, on April 24, Stern won several thousand dollars on a TV game show and immediately paid the $3,110 past-due EXERCISE 8-3 Accounting for Uncollectible Accounts-The "Income State- ment" Method account. INSTRUCTIONS Prepare four journal entries in general journal form to record the above events.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Explain within calculation