RECEIVABLES On December 1, Bowen's Bike Shop had a $88,000 normal balance in Accounts Receivable...
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RECEIVABLES On December 1, Bowen's Bike Shop had a $88,000 normal balance in Accounts Receivable and a $5,500 normal balance in the Allowance for Doubtful Accounts. In December, the company had net sales of $135,000 which included $100,000 of credit sales. Other December data includes collections from customers on accounts receivable of $75,000 and write-offs of uncollectable receivables of $2,000. Bowen uses the Aging of Accounts Receivable method to estimate uncollectible accounts at the end of the month. Using this method, Bowen has estimated the following: Percent Uncollectible Bad Debt Estimate Accounts Receivable Balance $45,000 $40,000 $26,000 Days Outstanding 60 days 4% 6% 10% Prepare all necessary transactions during December, including the December 31t adjusting entry to record the estimate of bad debt expense. Please label all entries. You may not use all t-accounts provided. ASSETS LIABILITIES EQUITY What is the December 31* Cash (Net) Realizable Value of Accounts Receivable? What if Bowen's Bike Shop used the Percentage of Receivables method instead? What parts of this transaction would change
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