The Accounts Receivable balance and Allowance for Bad Debts for Garcia Corporation at December 31, 2014, was $ 10,800 and $ 2,000 (credit balance). During 2015, Garcia completed the following transactions:
a. Sales revenue on account, $ 268,200 (ignore cost of goods sold).
b. Collections on account, $ 224,000.
c. Write-offs of uncollectibles, $ 5,900.
d. Bad debts expense of $ 5,000 was recorded.

1. Journalize Garcia’s transactions for 2015 assuming Garcia uses the allowance method.
2. Post the transactions to the Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense T-accounts and determine the ending balance of each account.
3. Show how accounts receivable would be reported on the balance sheet at December 31, 2015.

  • CreatedJanuary 16, 2015
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