Question

On August 31​, 2018​, Melrose Floral Supply had a $ 145 comma 000 debit balance in Accounts Receivable and a $ 5 comma 800 credit balance in Allowance for Bad Debts. During September​, Melrose ​made: times Sales on​ account, $ 540 comma 000. Ignore Cost of Goods Sold. times Collections on​ account, $ 581 comma 000. times ​Write-offs of uncollectible​ receivables, $ 5 comma 000.

Answer 1

Accounts receivables 540,000 debit

Sales revenues 540,000 credit

Cash 581,000 debit

Accounts Receivables 581,000 credit

Allowance for bad debt 5,000 debit

Account receivables 5,000 credit

Bad debt expense 16,200 debit

Allowance for bad debt 16,200 credit

Question: journalize September events and reocgnize the bad dbet expense assuming 3% of credit sales

Step-by-step explanation:

We need to record the events during september:

the sales on account will increase Account Receivables.

The collection decrease it.

The write-off under the allowance method will not reocngize any expense We decrease the accounts receivable agains t the allowance for the full amount

the expected bad debt on credit sale is 3%

540,000 x 3% = 16,200

this increase the allowance and declares the bad debt expense associate with the sales of the period