Chapter 8, Problem 43CP

(1)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of sales made during a specific period.

To determine: The estimated bad debt expense under the following methods at June 30, 2019.

(2)

To determine

To prepare: The journal entry, to record the allowance for bad debts using the percentage of sales method.

(3)

To determine

To prepare: The journal entry, to record the write-off of the customer’s bad debts.

(4)

To determine

To post: the accounts receivable, and allowance for bad debts T-account.

(5)

To determine

To show: The way of reporting accounts receivable on the balance sheet of CC Company as at June 30, 2019.