Financial Accounting.docx

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The Dream Kitchen is a small chain of kitchen remodeling stores. The company's year-end trial balance on December 31, 2016, included the information shown below: Accounts Receivable $ 990,440 Allowance for Doubtful Accounts (credit) 28,200 Net credit sales for 2016, were $8,900,000. Allowance for Doubtful Accounts has not yet been adjusted. 1. At the end of 2016, the following additional accounts receivable are deemed uncollectible: Prepare the December 31, 2016, journal entry to write off the below accounts. Of the accounts to be charged off, $17,200 are more than 60 days past due, and $8,310 are from 31 to 60 days past due. Post this transaction to the T-accounts for Accounts Receivable and Allowance for Doubtful Accounts provided in Requirement 4. Bob Anderson $ 10,800 Suzanne Bennet 2,180 James O’Brian 4,200 Omar Tirado 5,230 Casey Wilk 3,100 Total $ 25,510 Record the entry to write off account receivable deemed uncollectible.
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2. Assume that the company uses the percentage of sales method to estimate uncollectible accounts expense. After analyzing the prior year’s activities, management determined that losses from
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