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  3. during the year ended december 31,2021, kelly's ca

During the year ended December 31,2021, Kelly's Camera Shop had sales revenue of ...

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Accounting

During the year ended December 31,2021, Kelly's Camera Shop had sales revenue of
$145,000, of which $72,500 was on credit. At the start of 2021, Accounts Receivable
showed a $10,000 debit balance and the Allowance for Doubtful Accounts showed a
$550 credit balance. Collections of accounts receivable during 2021 amounted to
$63,000.
Data during 2021 follow:
a. On December 10, a customer balance of $1,250 from a prior year was determined to
be uncollectible, so it was written off.
b. On December 31, a decision was made to continue the accounting policy of basing
estimated bad debt losses on 2 percent of credit sales for the year.
Required:
Give the required journal entries for the two events in December.
2-a. Show how the amounts related to Bad Debt Expense would be reported on the
income statement.
2-b. Show how the amounts related to Accounts Receivable would be reported on the
balance sheet.
On the basis of the data available, does the 2 percent rate appear to be
reasonable?
Complete this question by entering your answers in the tabs below.
Give the required journal entries for the two events in December. (If no entry is required for a
Required" in the first account field.)
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