On February 28, Big White Ski Equipment had a $25,500 debit balance in Accounts Receivable. During March,

Question:

On February 28, Big White Ski Equipment had a $25,500 debit balance in Accounts Receivable. During March, the company had sales of $65,500, which included $60,000 in credit sales. March collections were $53,000, and write-offs of uncollectible receivables totaled $1,250. Other data include:

a. February 28 credit balance in Allowance for Doubtful Accounts is $1,300.

b. Bad debt expense is estimated as 3 percent of credit sales.

Required

1. Prepare journal entries to record sales, collections, write-offs of uncollectibles during March, and bad debt expense by the allowance method (using the percent-of-sales method). Use March 31 as the journal entry date. Explanations are not required.

2. Prepare T-accounts to show the ending balances in Accounts Receivable and Allowance for Doubtful Accounts. Compute net Accounts Receivable at March 31. How much does Big White expect to collect?

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...