The following information was abstracted from the 2016 financial statements of Jennings Company:
Sales $747,000*
Accounts Receivable, December 31, 2016: $128,000
Allowance for Uncollectible Accounts: $1,220 (credit balance)
Sales Discounts: $18,000*
Sales Returns: $12,400*
*30% related to credit sales
Answer the following questions for each of the following assumptions.
a. 3% of current accounts receivable are uncollectible
1. What is the amount of bad expense and provide the journal entry?
2. What is the ending balance in the Allowance for Uncollectible Accounts?
3. What is the amount of the Net Realizable Value?
b. 2.5% of net credit sales are uncollectible
1. What is the amount of bad expense and provide the journal entry?
2. What is the ending balance in the Allowance for Uncollectible Accounts?
3. What is the amount of the Net Realizable Value?