S & R Company uses the aging of accounts receivable approach to estimate bad debt expense. On December 31, 2015, an analysis of accounts receivable revealed the following:
Required:
(a) Calculate the amount of allowance for doubtful accounts that should be reported on the balance sheet at December 31, 2015.
(b) Calculate the amount of bad debts expense that should be reported on the 2015 income statement, assuming that the balance of Allowance for Doubtful Accounts on January 1 was $44,000 (credit balance) and accounts receivable written off during the year totaled $49,200.
(c) Present the appropriate general journal entry to record bad debts expense on December 31, 2015.
(d) Show how accounts receivable will appear on the balance sheet at December 31, 2015.
