Accounting for Uncollectible Receivables-Percentage of Sales Method
Response to the following problem:
The trial balance of Beecher's Sporting Warehouse, Inc., shows a $110,000 outstanding balance in Accounts Receivable at the end of 2008. During 2009, 90% of the total credit sales of $4,400,000 was collected, and no receivables were written off as uncollectible. The company estimated that 1.5% of the credit sales would be uncollectible. During 2010, the account of Damon Shilling, who owed $7,300, was judged to be uncollectible and was written off. At the end of 2010, the amount previously written off was collected in full from Mr. Shilling
Prepare the necessary journal entries for recording all the preceding transactions relating to uncollectibles on the books of Beecher's Sporting Warehouse, Inc.