Try another version of these questions During its first year of operations, Bright Lights Company earned net credit sales of $304,900. Industry experience suggests that bad debts will amount to 3% of net credit sales. At December 31, 2019, accounts receivable totaled $43,500. The company uses the allowance method to account for uncollectibles. Journalize Bright Lights Bad Debts Expense using the percent-of-sales method. Show how to report accounts receivable on the balance sheet at December 31, 2019. At January 1, 2020, Hilly Mountain Flagpoles had Account Receivable of $31,200 and Allowance for Bad Debts had a credit balance of $3,100. During the year, Hilly Mountain Flagpoles recorded the following: Journalize Hilly Mountain Flagpoles transactions that occurred during 2020. The company uses the allowance method. Post the transactions to the Accounts Receivable and Allowance for Bad Debts T accounts. d. Journalize Hilly Mountain Flagpoles adjustment to record bad debts expense assuming Hilly Mountain Flagpoles estimates bad debts as 5% of credit sales. Post the adjustment to the appropriate T accounts. Show how Hilly Mountaint Flagpoles will report net accounts receivable on its December 31, 2020, Balance Sheet. Be sure to use parenthesis () or a negative sign when needed. Date Description Debit Credit December 31 December 31
Balance Sheet−Partial
December 31, 2019Description Amount Subcategory,Assets Subcategory,Current Assets: Single line Single line Date Description Debit Credit December 31 Bad Debt Expense 9,147 December 31 Allowance for Bad Debt 9,147
Balance Sheet−Partial
December 31, 2019Description Amount Subcategory,Assets Subcategory,Current Assets: Accounts Receivable 43,500 Less: Allowance for Bad Debts -9,147Single line Single line34,353
Date Description Debit Credit a. a. a. b. b. c. c. Debit Credit Double line Double line Debit Credit Double line Double line Date Description Debit Credit d. d. Debit Credit Double line Double line Debit Credit Double line Double line
Balance Sheet−Partial
December 31, 2020Description Amount Subcategory,Assets Subcategory,Current Assets: Single line Single line Date Description Debit Credit a. A/R 156,200 a. Cash 16,000 a. Sales Revenue 172,200 b. Cash 131,400 b. A/R 131,400 c. Allowance for Bad Debt 1,800 c. A/R 1,800 Debit Credit 31,200 131,400 156,200 1,800 Double line54,200 Double line Debit Credit 1,800 3,100 Double line Double line1,300 Date Description Debit Credit d. Bad Debt Expense 7,810 d. Allowance for Bad Debt 7,810 Debit Credit 7,810 Double line7,810 Double line Debit Credit 1,800 3,100 7,810 Double line Double line9,110
Balance Sheet−Partial
December 31, 2020Description Amount Subcategory,Assets Subcategory,Current Assets: Accounts Receivable 54,200 Less: Allowance for Bad Debts -9,110Single line Single line45,090