The Accounts Receivable balance and Allowance for Bad Debts for Foreman Co. at January 1, 2016, was $25,000 Debit and $2,300 Credit balance respectively. During year ended 31 December 2016, Foreman Co earned revenue of $457,000 on account and collected $326,000 on account. Foreman wrote off $5,900 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 4% of accounts receivable
The Accounts Receivable balance and Allowance for Bad Debts for Foreman Co. at January 1, 2016, was $25,000 Debit and $2,300 Credit balance respectively. During year ended 31 December 2016, Foreman Co earned revenue of $457,000 on account and collected $326,000 on account. Foreman wrote off $5,900 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 4% of accounts receivable.
Requirements:
(a) PreparetheTAccountforAccountsReceivablesAccountforyearended31December 2016.
(b) Prepare the Journal Entry for increase/(decrease) in Allowance for Doubtful Account for year ended 31 December 2016.
(c) Prepare the extracts of the Balance Sheet as at 31 December 2016.