EXTRA CREDIT ASSIGNMENT - FALL 2015 - MILLER
Due at the beginning of class Wednesday, October 7th. Must stay for class and sign in on attendance sheet for credit. Will not be accepted later than ten minutes after the hour. Worth a maximum of 10 points. Show all calculations. Journal entries must be in proper format. Staple multiple pages together. Do not use ink. Write your name and class time at the top of each page.
Shamrock Company
Shamrock Company sells their merchandise only on account. The following data are available at December 31, 2014.
Sales $512,000
Sales returns and allowances
Sales discounts 10,000
2,000
Allowance for doubtful accounts at January 1, 2014 (credit balance) 3,500
Accounts receivable, December 31, 2014 200,000
1. Prepare the journal entry necessary on December 31, 2014 if the company estimates that bad debt expense should be 2% of net credit sales.
2. Prepare the journal entry necessary on December 31, 2014 if the company estimates that 5% of accounts receivable will be uncollectible.
3. Assume that the Allowance for Doubtful Accounts at January 1, 2014 has a debit balance of $2,500. Prepare the journal entry necessary on December 31, 2014 if the company estimates that 5% of accounts receivable will be uncollectible.
4. Assume that on March 1, 2015, the company writes off an uncollectible account in the amount of $1,500. Prepare the necessary journal entry on March 1st.