In this problem, we continue our accounting for Pure Water, Inc., from Chapter 5. Refer to the

Question:

In this problem, we continue our accounting for Pure Water, Inc., from Chapter 5. Refer to the Continuing Problem in Chapters 4 and 5. Assume that all 13 of the spas Pure Water, Inc., sold in September were sold on account for $5,000 each. Assume no collections on account were made in September. At September 30, Pure Water, Inc., estimates that 3% of the outstanding balance will not be collected. Pure Water uses the allowance method.
On August 31, the balance in is $3,700 and the balance in Allowance for Doubtful Accounts is $0.

Requirements
1. Calculate the ending balance in at September 30.
2. Journalize the entry to record Pure Water, Inc.’s bad debt expense for September.
3. How will be reflected on Pure Water, Inc.’s at September 30?

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