
Concept explainers
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
To indicate:
The journal entries and T-accounts for the given transactions
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
2.
To Indicate:
Reporting of Net Accounts Receivable on Balance Sheet as at 31st December, 2018.

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Chapter 9 Solutions
ACCOUNTING PRINCIPLES V1 6/17 >C<
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