The Accounts Receivable balance for Lake Company at December 31, 2017, was $20,000. During 2018, Lake earned revenue of $454,000 on account and collected $325,000 on account. Lake wrote off $5,600 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 5% of accounts receivable. Requirements 1. Assume Lake had an unadjusted $2,700 credit balance in Allowance for Bad Debts at December 31, 2018. Journalize Lake's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method. 2. Assume Lake had an unadjusted $2,400 debit balance in Allowance for Bad Debts at December 31, 2018. Journalize Lake's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method.

The Accounts Receivable balance for Lake Company at December 31, 2017, was $20,000. During 2018, Lake earned revenue of $454,000 on account and collected $325,000 on account. Lake wrote off $5,600 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 5% of accounts receivable. Requirements 1. Assume Lake had an unadjusted $2,700 credit balance in Allowance for Bad Debts at December 31, 2018. Journalize Lake's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method. 2. Assume Lake had an unadjusted $2,400 debit balance in Allowance for Bad Debts at December 31, 2018. Journalize Lake's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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