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B8-36B Beta Watches

Price: $3.50


P8-36B Accounting for uncollectible accounts using the allowance method
(percentage of sales), and reporting receivables on the balance sheet
[20–30 min]
Beta Watches completed the following selected transactions during 2011 and 2012:


2011
Dec 31 Estimated that uncollectible account expense for the year was 3% of credit
sales of $440,000 and recorded that amount as expense. Use the allowance
method.
31 Made the closing entry for uncollectible account expense.

2012
Jan 17 Sold inventory to Manny Vasquez, $800, on account. Ignore cost of goods sold.
Jun 29 Wrote off Manny Vasquez’s account as uncollectible after repeated efforts to
collect from him.
Aug 6 Received $800 from Manny Vasquez, along with a letter apologizing for being
so late. Reinstated Vasquez’s account in full and recorded the cash receipt.
Dec 31 Made a compound entry to write off the following accounts as uncollectible:
Bill Kappy, $1,400; Mike Venture, $1,100; and Russell Reeves, $200.
31 Estimated that uncollectible account expense for the year was 3% on credit
sales of $470,000 and recorded the expense.
31 Made the closing entry for uncollectible account expense.

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