At January 1, 2016, Hilltop Flagpoles had Accounts Receivable of $27,000, and Allowance for Bad Debts had
Question:
At January 1, 2016, Hilltop Flagpoles had Accounts Receivable of $27,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, HilltopHilltop Flagpoles recorded the following:
a. | Sales of $ 183 comma 000$183,000 ($ 164 comma 000$164,000 on account; $ 19 comma 000$19,000 for cash). Ignore Cost of Goods Sold. |
b. | Collections on account, $ 135 comma 000$135,000. |
c. | Write-offs of uncollectible receivables, $ 2 comma 800$2,800. |
1. | Journalize Hilltop'sHilltop's transactions that occurred during 2016. The company uses the allowance method. |
2. | Post Hilltop's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. |
3. | Journalize Hilltop's adjustment to record bad debts expense assuming Hilltop estimates bad debts as 22% of credit sales. Post the adjustment to the appropriate T-accounts. |
4. | Show how Hilltop Flagpoles will report net accounts receivable on its December 31, 2016 balance sheet. |
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura