The following information is extracted from Shelton Corporation’s accounting records at the beginning of 2019: 

Accounts Receivable $62,000 

Allowance for Doubtful Accounts 1,400 (credit) 

During 2019, sales on credit amounted to $591,000, $559,600 was collected on outstanding receivables and $2,700 of receivables were written off as uncollectible. On December 31, 2019, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. 

Required:

1. Prepare the journal entry necessary to record Shelton’s estimate of bad debt expense for 2019. 

2. Prepare the Accounts Receivable section of Shelton’s December 31, 2019, balance sheet. 

3. Compute Shelton’s receivables turnover. (Round to one decimal place.) 

4. If Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2?

Answer rating: 100% (QA)

3 average receivables should actually be 6... View the full answer