Answer:
Cloudbox
a) Year-end adjusting entry to estimate bad debts expense:
Debit Bad Debts Expense $1,500
Credit Allowance for Uncollectible accounts $1,500
To record the uncollectible allowance.
b) Current Assets Section of the Balance Sheet:
Cash $14,000
Accounts receivable (net) 8,500
Inventory 22,000
Prepaid Rent 3,000
Total current assets $47,500
Explanation:
a) Data and Calculations:
Credit sales = $200,000
Accounts receivable ending balance = $10,000
Estimated uncollectible accounts = $1,500
Cash $14,000
Accounts receivable (net) $8,500 ($10,000 -$1,500)
Inventory $22,000
Prepaid Rent $3,000
