During its first year of operations, Spring Break Travel earned revenue of $700,000 on account. Industry experience

Question:

During its first year of operations, Spring Break Travel earned revenue of $700,000 on account. Industry experience suggests that Spring Break's bad debts will amount to 1 percent of revenues. At December 31, 2013, total $80,000. The company uses the allowance method to account for uncollectibles.
1. Journalize Spring Break Travel's bad-debt expense using the percent-of- sales method.
2. Show how Spring Break should report on its at December 31, 2013.
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