Response to the following problem:
At December 31, 2016, the Elias Paper Company Ltd. balance sheet had a balance of $1,268,800 in accounts receivable. In addition, a contra account showed an allowance for doubtful accounts balance of $32,400. Credit sales for 2017 were $8,540,000, with collections of the receivables amounting to $8,262,560, including $15,600 that Elias had written off as uncollectible in December 2016 from Huron Supplies Ltd. During 2017, Elias wrote off $33,660 as uncollectible. On November 1, 2017, a customer with a $720,000 balance in accounts receivable sent $200,000 in cash (included in the cash collections) and a note receivable for the balance. The account was considered to be collectible. At December 31, 2017, Elias' year-end, the balance in accounts receivable included $200,580 of past due accounts, which management estimated would result in a 10 per cent loss, based on past experience. In addition, it was management's policy to set up an allowance on remaining accounts receivable equal to 2 percent of the balance outstanding.
1. Prepare general journal entries for all 2017 transactions relating to notes and accounts receivable.
2. Prepare all adjusting entries at December 31, 2017.
3. Show the amount that should appear in the 2017 income statement as bad debt expense.
4. What is the total for the allowance for doubtful accounts at December 31, 2017?