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The following information is extracted from Shelton Corporations accounting records on January 1:

Accounts Receivable	$67,000
Allowance for Doubtful Accounts	1,300	(credit)

During the year, sales on credit amounted to $582,000, $552,800 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance.

	Required:
1.	Prepare the journal entry necessary to record Sheltons estimate of bad debt expense on December 31.
2.	Prepare the Accounts Receivable section of Sheltons December 31, balance sheet.
3.	Compute Sheltons receivables turnover.

Chart of Accounts

CHART OF ACCOUNTS
Shelton Corporation
General Ledger
ASSETS 111 Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings	REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense

General Journal

1. Prepare the journal entry necessary to record Sheltons estimate of bad debt expense on December 31.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2

Balance Sheet

2. Prepare the Accounts Receivable section of Sheltons December 31, balance sheet. Use the minus sign to indicate all negative values.

SHELTONS CORPORATION

Partial Balance Sheet

December 31

1	Accounts Receivable
2	Allowance for Doubtful Accounts
3	Net Accounts Receivable

Analysis

3. Compute Sheltons receivables turnover.

Additional Instruction

Sheltons receivable turnover is .

Answer & Explanation Solved by verified expert

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