Please explain your answer. Thank you! Use the following information to answer Exercises E8-18...
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Use the following information to answer Exercises E8-18 and E8-19. At January 1, 2018, Hilltop Flagpoles had Accounts Receivable of $28,000, and Allow- ance for Bad Debts had a credit balance of $3,000. During the year, Hilltop Flagpoles recorded the following: a. Sales of $185,000 ($164,000 on account; $21,000 for cash). Ignore Cost of Goods Sold. b. Collections on account, $135,000. c. Write-offs of uncollectible receivables, $2,300. Learning Objectives 1, 3 3. Bad Debts Expense $4,770 E8-19 Accounting for uncollectible accounts using the allowance method (percent-of-receivables) and reporting receivables on the balance sheet Requirements 1. Journalize Hilltop's transactions that occurred during 2018. The company uses the allowance method. 2. Post Hilltop's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. 3. Journalize Hilltop's adjustment to record bad debts expense assuming Hilltop esti- mates bad debts as 10% of accounts receivable. Post the adjustment to the appro- priate T-accounts. 4. Show how Hilltop Flagpoles will report net accounts receivable on its December 31, 2018, balance sheet
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