This problem continues the Daniels Consulting situation from Problem P7-33 of Chapter 7 and Problem P6-38 of Chapter 6. Daniels Consulting reviewed the receivables list from the January transactions. Daniels uses the allowance method for receivables, estimating un-collectibles to be 6% of January sales revenue of $8,180. Daniels identified on February 15 that a customer was not going to pay his receivable of $176.
Requirements
1. Journalize the January 31 entry to record and establish the allowance using the percent-of-sales method for January sales revenue.
2. Journalize the entry to record the write-off of the customers bad debt.