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At
January
1,
2016,
Hilltop
Flagpoles had Accounts Receivable of
$27,000,
and Allowance for Bad Debts had a credit balance of
$3,000.
During the year,
HilltopHilltop
Flagpoles recorded the following:
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| a. | Sales of $ 183 comma 000$183,000 ($ 164 comma 000$164,000 on account; $ 19 comma 000$19,000 for cash). Ignore Cost of Goods Sold. |
| b. | Collections on account, $ 135 comma 000$135,000. |
| c. | Write-offs of uncollectible receivables, $ 2 comma 800$2,800. |
(Click the icon to view the transactions.)
Read the requirements
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| 1. | Journalize Hilltop'sHilltop's transactions that occurred during 2016. The company uses the allowance method. |
| 2. | Post Hilltop's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. |
| 3. | Journalize Hilltop's adjustment to record bad debts expense assuming Hilltop estimates bad debts as 22% of credit sales. Post the adjustment to the appropriate T-accounts. |
| 4. | Show how Hilltop Flagpoles will report net accounts receivable on its December 31, 2016 balance sheet. |
Answer & Explanation
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