Apply GAAP for uncollectible receivables
Response to the following problem:
At December 31, 2014, Goldstone Travel has an Accounts Receivable balance of $82,000. Allowance for Doubtful Accounts has a credit balance of $730 before the year-end adjustment. Credit Service Revenue for 2014 was $795,000. Goldstone Travel estimates that Doubtful-Account Expense for the year is 2% of credit service revenue. Make the December 31 entry to record Doubtful-Account Expense. Show how the Accounts Receivable and the Allowance for Doubtful Accounts are reported on the balance sheet at December 31, 2014.