During the year ended December 31, 2015, Kelly\'s Camera Shop had sales revenue

Question

During the year ended December 31, 2015, Kelly's Camera Shop had sales revenue of $180,000, of which $90,000 was on credit. At the start of 2015, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $620 credit balance. Collections of accounts receivable during 2015 amounted to $70,000 Data during 2015 follow: a. On December 10, a customer balance of $1,600 from a prior year was determined to be uncollectible, so it was written off b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. Required: 1. Give the required journal entries for the two events in December. f(If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account fleld.)

Explanation / Answer

Journal entry :

2) Balance sheet presentation :

Income statement :

Date accounts & explanation debit credit Dec 10 Allowance for doubtful accounts 1600     Account receivable 1600 (To record amount write off) Dec 31 Bad debt expense (90000*2%) 1800      Allowance for doubtful accounts 1800 (To record bad debt expense)

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