Question

(right click + open in new tab for higher resolution)

Record each transaction using the allowance method. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) [The following information applies to The questions displayed below.] At the beginning of 2018. Brad’s Heating & Air (BHA) has a balance of $24, 100 in accounts receivable. Because BHA is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of 2018. BHA wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that BHA now will need to use the allowance method. The following transactions occur during 2018 and 2019. During 2018. install air conditioning systems on account. $171,000. During 2018. collect $166,000 from customers on account. At the end of 2018. estimate that uncollectible accounts total 15% of ending accounts receivable. In 2019, customers’ accounts totaling $6, 100 are written off as uncollectible. Record each transaction using the direct write-off method. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *