During Burns Company\'s first year of operations, credit sales totaled $152,000

Question

During Burns Company's first year of operations, credit sales totaled $152,000 and collections on credit sales totaled $111,000. Bums estimates that bad debt losses wil be 1 5% of credit sales By year-end, Burns had written off $360 of specific accounts as uncollectible. Required 1.Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry to write-off specific accounts. Note: Enter debits before credits Transcation General Journal Debit Credit Clear entry View general journal Record entry

Explanation / Answer

Journal entries related to uncollectibles account and bad debt expense is as recorded below:

2. balance Sheet

Date Particulars L.F Amount ($) Amount ($) Dec-31 Allowance for doubtful accounts 360 Account Receivable 360 (For write off account receivable) Dec-31 Bad Debts (152,000*1.5%) 2,280 Allowance for doubtful accounts 2,280 (For bad debt created)

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