Santagos Industries Gathered the Following Information from Its Accounting Records $\quad\$ 730,000$

question 121

Essay

Santagos Industries gathered the following information from its accounting records for the year ended December 31, 2019, prior to adjustment: Net credit sales for the year $\quad\$ 730,000$
Accounts receivable balance, Dec. $31,2019\quad145,000$
Allowance for doubtful
accounts balance, Dec. $31,2019 \quad 1,850 \mathrm {~~~ Cr. }$ Santagos uses the allowance method of accounting for uncollectible accounts and estimates bad-debt expense at 1.5% of net credit sales.
Required:
a)Prepare the adjusting entry to record bad-debt expense on December 31, 2019.
b)Determine the balance in allowance for doubtful accounts after the adjusting entry is prepared.
c)Show how the receivables would be reported on the December 31, 2019, balance sheet for Santagos Industries.

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Definitions:

Product

An item or service that is created, manufactured, or refined for sale.

Want

A desire for something that isn't essential but is desired for satisfaction or fulfillment.

Need

A requirement essential to someone's well-being or the success of a task or objective.

Shelter

A structure that provides protection from weather and harm, serving as a place of safety and refuge.