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Allowance Method for Accounting for Bad Debts At the beginning of 2016, EZ Tech Company's Accounts Receivable balance was $140,000, and the balance in Allowance for Doubtful Accounts was $2,350 (Cr.). EZ Tech's sales in 2016 were $1,050,000, 80% of which were on credit. Collections on account during the year were $670,000. The company wrote off $4,000 of uncollectible accounts during the year. Required: 1. Prepare summary journal entry related to the (a) sale during 2016. Indicate the effect on financial statement items by selecting "-"for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement, Journal Balance Sheet Income Statement Stockholders' Net Description Debit Credit Assets Liabilities Equity Revenues Expenses Income (a) Prepare summary journal entry related to the (b) collections during 2016. Journal Balance Sheet Income Statement Stockholders' Net Description Debit Credit Assets Liabilities Equity Revenues Expenses Income (b) Prepare summary journal entry related to the (c) write-offs of accounts receivable during 2016 Journal Balance Sheet Income Statement Stockholders' Net Description Debit Credit Assets Liabilities Equity Revenues Expenses Income (c) 2a. Prepare the journal entry to recognize bad debts assuming that bad debts expense is 3% of credit sales. Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), "+" for increase (or positive effect and "NE" for No Entry (or no effect) on the financial statement. Journal Balance Sheet Income Statement Stockholders' Net Description Debit Credit Assets Liabilities Equity Revenues Expenses Income (a) 2b. Prepare the journal entry to recognize bad debts assuming that amounts expected to be uncollectible are 6% of the year-end accounts receivable. Journal Balance Sheet Income Statement Stockholders' Net Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income (b) 3. What is the net realizable value of accounts receivable on December 31, 2016, under each assumption in part (2)? Using the percentage of sales approach, the net realizable value of the receivables is? Using the percentage of year-end receivables approach, the net realizable value of the receivables is? 4. The recognition of bad debts expense the net realizable value by the amount recorded in bad debts expense and the . The write-off of accounts the net realizable value

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