Accounting -EXTRA CREDIT ASSIGNMENT – FALL 2015 – MILLER

| January 31, 2017

Question
EXTRA CREDIT ASSIGNMENT – FALL 2015 – MILLER

Due at the beginning of class Wednesday, October 7th. Must stay for class and sign in on attendance sheet for credit. Will not be accepted later than ten minutes after the hour. Worth a maximum of 10 points. Show all calculations. Journal entries must be in proper format. Staple multiple pages together. Do not use ink. Write your name and class time at the top of each page.

Shamrock Company

Shamrock Company sells their merchandise only on account. The following data are available at December 31, 2014.

Sales

$512,000

Sales returns and allowances

Sales discounts

10,000

2,000

Allowance for doubtful accounts at January 1, 2014 (credit balance)

3,500

Accounts receivable, December 31, 2014

200,000

1. Prepare the journal entry necessary on December 31, 2014 if the company estimates that bad debt expense should be 2% of net credit sales.

2. Prepare the journal entry necessary on December 31, 2014 if the company estimates that 5% of accounts receivable will be uncollectible.

3. Assume that the Allowance for Doubtful Accounts at January 1, 2014 has a debitbalance of $2,500. Prepare the journal entry necessary on December 31, 2014 if the company estimates that 5% of accounts receivable will be uncollectible.

4. Assume that on March 1, 2015, the company writes off an uncollectible account in the amount of $1,500. Prepare the necessary journal entry on March 1st.

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