selected unadjusted account balances at december 31 2014 are shown below for demron 4374049

Selected unadjusted account balances at December 31, 2014, are shown below for Demron Servicing. Required a. Demron estimates that 1.5% of net credit sales will prove to be uncollectible. Prepare the adjusting entry required on December 31, 2014, to estimate uncollectible receivables. b. During 2015, credit sales were $620,000 (cost of sales $406,500); sales discounts of $12,000 were taken when accounts receivable of $440,000 were collected; and accounts written off during the year totaled $10,000. Prepare the entries for these transactions. c. Record the adjusting entry required on December 31, 2015, to estimate uncollectible receivables assuming it is based on 1.5% of net credit sales. d. Show how accounts receivable would appear on the December 31, 2015, balance sheet. Analysis Component: Comment on the advantages and disadvantages of using the income statement approach for estimating uncollectible. View Solution:
Selected unadjusted account balances at December 31 2014 are shown

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