The Westlake Company uses the percent of sales method of accounting for uncollectible accounts receivable. At...

 

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The Westlake Company uses the percent of sales method of accounting for uncollectible accounts receivable. At the beginning of the current year, the Allowance for Doubtful Accounts had normal balance of $6,000. The following transactions took place during the current year: Oct 11 Westlake Company determined that the $8,700 account receivable of the ITC Company was uncollectible and wrove it off. Westlake Company estimates that 1.5% of its $1,850,000 of credit sales would Dec. 31 be uncollectible. The Accounts Receivable Account had a balance of $1,200,000 Required: Part a. Prepare journal entries needed to account for the above information. Part b. Determine the balance of the Allowance for Doubtful Accounts at the end of the current year. Assume that the transactions above are the only transactions affecting this account during the year. Part c. Illustrate the impact (or explain the impact including location) on the Income Statement and the Balance Sheet of the above information. The Westlake Company uses the percent of sales method of accounting for uncollectible accounts receivable. At the beginning of the current year, the Allowance for Doubtful Accounts had normal balance of $6,000. The following transactions took place during the current year: Oct 11 Westlake Company determined that the $8,700 account receivable of the ITC Company was uncollectible and wrove it off. Westlake Company estimates that 1.5% of its $1,850,000 of credit sales would Dec. 31 be uncollectible. The Accounts Receivable Account had a balance of $1,200,000 Required: Part a. Prepare journal entries needed to account for the above information. Part b. Determine the balance of the Allowance for Doubtful Accounts at the end of the current year. Assume that the transactions above are the only transactions affecting this account during the year. Part c. Illustrate the impact (or explain the impact including location) on the Income Statement and the Balance Sheet of the above information.

Answer rating: 100% (QA)

Part a Journal entries needed to account for the above information Oct 11 Bad debt expense 8700 Acco... View the full answer