Estimating and Recording Bad Debt Estimates and WriteOffs; Reporting of Accounts
Receivable
Mast Company's December balances from the prior year related to accounts receivable
follow.
During the current year, $ of accounts receivable is considered uncollectible, and
no more effort to collect these accounts will be made. Total sales for the current year are
$ of which $ are cash sales. A total of $ cash was collected
during the current year from sales that were originally made on account.
Required
a Assuming that Mast applies the allowance method to estimate net accounts receivable
and uses of accounts receivable as its estimate of expected credit losses, prepare the
journal entries to record writeoffs and to record bad debt expense for the current year,
and disclosure on gross and net accounts receivable on the balance sheet at December
of the current year.
