Classic Auto Parts sells new and used auto parts. Although a majority of its sales are cash

Question:

Classic Auto Parts sells new and used auto parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. During 2016, its first year of operations, Classic Auto Parts experienced the following:
Sales on account .................... $320,000
Cash sales ....................... 680,000
Collections of .............. 295,000
Uncollectible accounts charged off during the year ....... 1,400
Required
a. Assume that Classic Auto Parts uses the allowance method of accounting for uncollectible accounts and estimates that 1 percent of its sales on account will not be collected. Answer the following questions:
(1) What is the balance at December 31, 2016?
(2) What is the ending balance of the Allowance for Doubtful Accounts at December 31, 2016, after all entries and adjusting entries are posted?
(3) What is the amount of uncollectible accounts expense for 2016?
(4) What is the net realizable value of at December 31, 2016?
b. Assume that Classic Auto Parts uses the direct write-off method of accounting for uncollectible accounts. Answer the following questions:
(1) What is the balance at December 31, 2016?
(2) What is the amount of uncollectible accounts expense for 2016?
(3) What is the net realizable value of at December 31, 2016?
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...