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Chapter 2
Accounting for Receivables
AP-10B (
2
3
)
Dalton Company has the following unadjusted balances on December 31, 2016. All amounts
shown are in their normal balance.
Accounts receivable
$425,750
Allowance for doubtful accounts
25,000
Sales (10% of sales are cash sales)
950,000
Sales discounts
15,000
Required
a) Dalton estimates that 1.5% of net credit sales will be uncollectible. Prepare the journal
entry to record the uncollectible receivables on December 31, 2016.
Date
Account Title and Explanation
Debit
Credit
b) Prepare the balance sheet presentation of accounts receivable on December 31, 2016.
AP-11B (
2
3
)
Fishy uses the balance sheet approach to estimate uncollectible receivables. Use the following
table to determine the amount of bad debt expense, and prepare the journal entry on
June 30, 2016 to record the bad debt expense. The allowance account has a zero balance.
Aging Category
Bad Debt %
Balance
30 days
2%
$25,000
31–60 days
3%
10,000
More than 60 days
4%
2,000
Total
$37,000
