Chapter 9, Problem P9.37BPGB

To determine

Allowance Method (Percentage of Sales): Under this method, the Allowance for Uncollectible Accounts is calculated as a percentage of sales. This percentage is estimated on the basis of past experience and the credit policy. The estimated percentage is multiplied by the net credit sales to arrive at the Allowance for Uncollectible Accounts. This method ignores the previous balance in Allowance for Uncollectible Accounts.

1 (a). Recording the Journal entries in the books of Dialex Watches:

To indicate:

The journal entries and T-accounts for the given transactions

To determine

1 (b). Opening of T-accounts in the book of Dialex Watches.

To Indicate:

T-accounts of Allowances for Uncollectible Accounts and Uncollectible Accounts Expense

To determine

2. Balance Sheet Extract:

To Indicate:

Reporting of Net Accounts Receivable on Balance Sheet as at 31^st December, 2018.