Question

the accounts reciavable balance by highland company at 31, 2017 was 25 ,000 during 2018 highland earned revenue of 452,000 on account and collected 329,000 on account , hihgland wrote off 5,400 reciavable as uncollective Industry experience suggests that uncollectible accounts will amount to 6% of accounts receivable. Assume highland had an unadjusted 2,000 credit balance in allowance for bad debts at December 21 , 2018 , journalize highland December 31 , 2018 , adjustment to record a bad debt expense using the percent -of- receivables method ( record debits first , then credits , selec the explanation on the las line of the journal entry table.) Assume highland had an unadjusted 1,800 debit balance in allowance for bad debts at December 31 . 2018 . journalize highlands December 31 , 2018 adjustment to record bad debts exprense using the percent of reciables method( record debits first , then credits , selec the explanation on the las line of the journal entry table)

Answer 1

Req 1.
Accounts receivable balance:
Beginning balance			25000
Add: Revenue			452000
Less: Collections			-329000
Less: Amount wirtten off			-5400
Balance in Accounts receivable			142600
Required balance in Allowance			8556
	(6% of 142600)
Less: Actual credit balance			2000
Bad debts expense			6556
Journal entry:
Bad debts expense Dr.			6556
Allowance for bad ddebts				6556
Req 2.
Accounts receivable balance:
Beginning balance			25000
Add: Revenue			452000
Less: Collections			-329000
Less: Amount wirtten off			-5400
Balance in Accounts receivable			142600
Required balance in Allowance			8556
	(6% of 142600)
Add: Debt balance in Allowance			1800
Bad debts expense			10356
Journal entry:
Bad debts expense Dr.			10356
Allowance for bad ddebts				10356