In this problem, we continue our accounting for Fitness Equipment Doctor, Inc., from Chapter 5. Refer to

Question:

In this problem, we continue our accounting for Fitness Equipment Doctor, Inc., from Chapter 5. Refer to the Continuing Problem in Chapters 4 and 5. Assume that all 15 of the treadmills Fitness Equipment Doctor, Inc., sold in July were sold on account for $4,350 each. In addition to the treadmills, Fitness Equipment Doctor also sold $13,700 of other fitness equipment and repair services on account. Collections on account during the month of July totaled $8,875. At July 31, Fitness Equipment Doctor, Inc., estimates that 4 percent of the outstanding Accounts Receivable balance will not be collected. Fitness Equipment Doctor uses the allowance method. On June 30, the balance in Accounts Receivable is $2,200 and the balance in Allowance for Doubtful Accounts is $0.

Requirements

1. Calculate the ending balance in Accounts Receivable at July 31.

2. Journalize the entry to record Fitness Equipment Doctor, Inc.'s bad debt expense for July.

3. How will Accounts Receivable be reflected on Fitness Equipment Doctor, Inc.'s balance sheet at July 31?

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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...