Try another version of these questions During its first year of operations, Bright Lights Company earned net credit sales of $311,000. Industry experience suggests that bad debts will amount to 5% of net credit sales. At December 31, 2019, accounts receivable totaled $49,900. 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 $31,600 and Allowance for Bad Debts had a credit balance of $3,200. 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 2% 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 15,550 December 31 Allowance for Bad Debt 15,550
Balance Sheet−Partial
December 31, 2019Description Amount Subcategory,Assets Subcategory,Current Assets: Accounts Receivable 49,900 Less: Allowance for Bad Debts -15,550Single line Single line34,350
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 155,300 a. Cash 16,900 a. Sales Revenue 172,200 b. Cash 130,400 b. A/R 130,400 c. Allowance for Bad Debt 2,000 c. A/R 2,000 Debit Credit 31,600 130,400 155,300 2,000 Double line54,500 Double line Debit Credit 2,000 3,200 Double line Double line1,200 Date Description Debit Credit d. Bad Debt Expense 3,106 d. Allowance for Bad Debt 3,106 Debit Credit 3,106 Double line3,106 Double line Debit Credit 2,000 3,200 3,106 Double line Double line4,306
Balance Sheet−Partial
December 31, 2020Description Amount Subcategory,Assets Subcategory,Current Assets: Accounts Receivable 54,500 Less: Allowance for Bad Debts -4,306Single line Single line50,194