Shamrock Company
Shamrock Company sells their merchandise only on account. The following data are available at December 31, 2014.
|
Sales
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$512,000
|
|
Sales returns and allowances
Sales discounts
|
10,000
2,000
|
|
Allowance for doubtful accounts at January 1, 2014 (credit balance)
|
3,500
|
|
Accounts receivable, December 31, 2014
|
200,000
|
1.Prepare the journal entry necessary on December 31, 2014 if the company estimates that bad debt expense should be 2% of net credit sales.
2.Prepare the journal entry necessary on December 31, 2014 if the company estimates that 5% of accounts receivable will be uncollectible.
3.Assume that the Allowance for Doubtful Accounts at January 1, 2014 has a debitbalance of $2,500. Prepare the journal entry necessary on December 31, 2014 if the company estimates that 5% of accounts receivable will be uncollectible.
4.Assume that on March 1, 2015, the company writes off an uncollectible account in the amount of $1,500. Prepare the necessary journal entry on March 1st.