During 2014, Robby’s Camera Shop had sales revenue of $158,000, of which $74,000 was on credit....

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Accounting

During 2014, Robby’s Camera Shop had sales revenue of $158,000,of which $74,000 was on credit. At the start of 2014, AccountsReceivable showed a $25,000 debit balance, and the Allowance forDoubtful Accounts showed a $900 credit balance. Collections ofaccounts receivable during 2014 amounted to $59,000.
Data during 2014 follows:
a.
On December 31, 2014, an Account Receivable (J. Doe) of $1,300from a prior year was determined to be uncollectible; therefore, itwas written off immediately as a bad debt.
b.
On December 31, 2014, on the basis of experience, a decision wasmade to continue the accounting policy of basing estimated bad debtlosses on 1.5 percent of credit sales for the year.
Required:
1.
Prepare the required journal entries for the two items onDecember 31, 2014 (end of the accounting period). (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.)
2.
Show how the amounts related to Accounts receivable and Bad debtexpense would be reported on the income statement and balance sheetfor 2014. Disregard income tax considerations. (Amounts tobe deducted should be indicated by a minus sign.)
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In the books of Robbys Camera Shop Journal Entries Date Particulars Debit Credit 31122014 Bad debts written off Ac 1300 To Accounts Receivable Ac 1300 Being irrecoverable amount from J Doe written off See Answer

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a.	On December 31, 2014, an Account Receivable (J. Doe) of $1,300from a prior year was determined to be uncollectible; therefore, itwas written off immediately as a bad debt.
b.	On December 31, 2014, on the basis of experience, a decision wasmade to continue the accounting policy of basing estimated bad debtlosses on 1.5 percent of credit sales for the year.

Required:
1.	Prepare the required journal entries for the two items onDecember 31, 2014 (end of the accounting period). (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.)

2.	Show how the amounts related to Accounts receivable and Bad debtexpense would be reported on the income statement and balance sheetfor 2014. Disregard income tax considerations. (Amounts tobe deducted should be indicated by a minus sign.)