Try another version of these questions During its first year of operations, Bright Lights Company earned net credit sales of $307,200. Industry experience suggests that bad debts will amount to 3% of net credit sales. At December 31, 2019, accounts receivable totaled $42,500. 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 $31,700 and Allowance for Bad Debts had a credit balance of $3,400. 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 4% 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 9,216 December 31 Allowance for Bad Debt 9,216
Balance Sheet−Partial
December 31, 2019Description Amount Subcategory,Assets Subcategory,Current Assets: Accounts Receivable 42,500 Less: Allowance for Bad Debts -9,216Single line Single line33,284
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 157,200 a. Cash 16,800 a. Sales Revenue 174,000 b. Cash 131,100 b. A/R 131,100 c. Allowance for Bad Debt 2,500 c. A/R 2,500 Debit Credit 31,700 131,100 157,200 2,500 Double line55,300 Double line Debit Credit 2,500 3,400 Double line Double line900 Date Description Debit Credit d. Bad Debt Expense 6,288 d. Allowance for Bad Debt 6,288 Debit Credit 6,288 Double line6,288 Double line Debit Credit 2,500 3,400 6,288 Double line Double line7,188
Balance Sheet−Partial
December 31, 2020Description Amount Subcategory,Assets Subcategory,Current Assets: Accounts Receivable 55,300 Less: Allowance for Bad Debts -7,188Single line Single line48,112