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Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet Dialex Watches completed the following selected transactions during 2018 and 2019: 2018 Estimated that bad debts expense for the year was 3% of credit sales of 5410,000 and recorded that amount as expense. The company uses the allowance method. Dec. 31 Made the closing entry for bad debts expense. 31 2019 Jan. 17 Sold merchandise inventory to Marty White, $400, on account. Ignore Cost of Jun. 29 Wrote off Marty White's account as uncollectible after repeated efforts to Aug. 6 Received $400 from Marty White, along with a letter apologizing for being Dec. 31 Made a compound entry to write off the following accounts as uncollectible: Goods Sold. collect from him. so late. Reinstated White's account in full and recorded the cash receipt. Barry Krisp, $1,600; Maria Bryant, $1,100; and Richard Renik, $400. Estimated that bad debts expense for the year was 3% on credit sales of $490,000 and recorded the expense. Made the closing entry for bad debts expense. 31 31 Requirements 1. Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assuming the accounts begin with a zero balance. Record the transactions in the general journal (omit explanations), and post to the two T-accounts. 2. Assume the December 31, 2019, balance of Accounts Receivable is $136,000. Show how net accounts receivable would be reported on the balance sheet at that date

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