Kelly Green Corp. uses the allowance method for estimating bad debts. Total Sales for the year were $$1,450,000.$ The unadjusted balance for Accounts Receivable was is $$190,000$ debit balance and Allowance for Doubtful Accounts $$3,500$ credit balance. Note: Situations A and $C$ are independent of each other.

If you find yourself getting stuck trying to complete this problem here is a link to a video of me solving a very similar problem. $($Ignore any part that refers to My Open Math as these problems are now being done in these Excel spreadsheets.$)$

Estimating Bad Debts $-$ Sof Sales and Ss of A$/$R Methods Demo$/$Example $-$ YouTube Video

Journal Entries:

Debit

Gredit

Prepare the Dec $31$ adjusting entry assuming Kelly Green uses the percent of sales method for bad debts. Kelly estimates $1\%$ of total sales will be uncollectible.

a$)$

b$)$ entry. Hint: remember to pose your adjusting entry.

$\backslash$table$[[$Partial Balance Sheet$],[$Accounts Receivable$],[$Less: Allowance for Doubrful Accounts$],[$Accounts Receivable, net$],[]]$

Prepare the Dec $31$ adjusting entry assuming Kelly Green uses the percent of accounts receivable method for estimating uncollectible accounts. Kelly estimates

c$)6\%$ of accounts receivable will be uncollectible.

d$)$

Show how she Accounts Receivable and Allowance for Doubtful Accounts appear on the balance sheet after the adjusting eniry. Hint: remember to post your adjusting entry.

$\backslash$table$[[$Partial Balance Shee?,$],[$Accounts Recelvable,$]]$

Less: Allowance for Doubtful Accounts

Hint: Make sure you enter this amount as a negative since it is being subtracted.

Accounts Receivable, net