The Accounts Receivable balance for Clark, Inc. at December 31, 2014, was $ 18,000. During 2015, Clark earned revenue of $ 447,000 on account and collected $ 324,000. Clark wrote off $ 5,000 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 2% of accounts receivable.

Requirements

1. Assume Clark had a $ 2,400 credit balance in Allowance for Bad Debts at December 31, 2014. Journalize Clark’s December 31, 2015, adjustment to ­record bad debts expense using the percent- of- receivables method.

2. Assume Clark had a $ 2,000 debit balance in Allowance for Bad Debts at December 31, 2014. Journalize Clark’s December 31, 2015, adjustment to record bad debts expense using the percent-of-receivables method.