Additional Exercise 196

Fleming Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 1% of net credit sales will eventually be uncollectible. Selected account balances at December 31, 2014, and December 31, 2015, appear below:

		12/31/14		12/31/15
Net Credit Sales		$400,000		$500,000
Accounts Receivable		60,000		80,000
Allowance for Doubtful Accounts		5,200		?

Record the following events in 2015. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Aug.	10		Determined that the account of Sue King for $800 is uncollectible.
Sept.	12		Determined that the account of Tom Young for $3,700 is uncollectible.
Oct.	10		Received a check for $500 as payment on account from Sue King, whose account had previously been written off as uncollectible. She indicated the remainder of her account would be paid in November.
Nov.	15		Received a check for $300 from Sue King as payment on her account.

Date	Account Titles and Explanation	Debit	Credit
Aug. 10
Sept. 12
Oct. 10
	(To reinstate Sue King account previously written off)
	(To record collection on account)
Nov. 15

Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2015. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31

What is the balance of Allowance for Doubtful Accounts at December 31, 2015?

Balance of allowance for Doubtful Accounts at December 31, 2015

$