Question: Applying the allowance method to account for uncollectibles The Accounts Receivable balance and Allowance for Bad Debts for Turning Leaves Furniture Restoration at December 31, 2015, was $10,800 and $2,000 (credit balance). During 2016, Turning Leaves completed the following transactions:
a. Sales revenue on account, $265,800 (ignore Cost of Goods Sold).
b. Collections on account, $220,000.
c. Write-offs of uncollectibles, $6,100.
d. Bad debts expense of $5,000 was recorded.
Requirements: 1. Journalize Turning Leaves's transactions for 2016 assuming Turning Leaves uses the allowance method.
2. Post the transactions to the Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense T-accounts, and determine the ending balance of each account.
3. Show how accounts receivable would be reported on the balance sheet at December 31, 2016.