The Connecting Company Uses the Percent of Sales Method of Accounting

question 36

Essay

The Connecting Company uses the percent of sales method of accounting for uncollectible accounts receivable.During the current year,the following transactions occurred:
$\begin{array}{|l|l|}\hline\text { Sept. } 7 & \begin{array}{l}\text { Connecting Company determined that the } \$ 8,100 \text { account receivable of the Helena } \\\text { Company was uncollectible and wrote it off. }\end{array} \\\hline \text { Oct. 15 } & \begin{array}{l}\text { Connecting Company determined that the } \$ 2,500 \text { account receivable of the Tree } \\\text { Company was uncollectible and wrote it off. }\end{array}\\\hline \text { Nov. } 9 & \begin{array}{l}\text { Helena Company paid } \$ 6,000 \text { of the amount owed to the Connecting Company. } \\\text { Connecting Company does not expect further collections from the Helena } \\\text { Company. }\end{array} \\\hline \text { Dec. 31 } & \begin{array}{l}\text { Connecting Company estimates that } 0.5 \% \text { of its } \$ 1,900,000 \text { of credit sales would be } \\\text { uncollectible. }\end{array}\\\hline\end{array}$

1.Prepare the general journal entries to record these transactions.
If the balance of the allowance for uncollectible accounts was an $8,000 credit on January 1 of the current year,determine the balance of the allowance for doubtful accounts at December 31 of the current year.Assume that the transactions above are the only transactions affecting the allowance for doubtful accounts during the year.

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Definitions:

Three-Stage Model

A theoretical model describing a process or phenomenon in three distinct stages, used in various fields such as psychology, sociology, and literature for analysis and understanding.

Dispositional Attribution

The tendency to attribute someone's behavior to their personality or character rather than to situational factors.

Cognitive Load

The total amount of mental effort being used in the working memory, influencing how information is processed and learned.

Internal Factors

Elements or forces within an individual that influence their behavior, emotions, or attitudes, including traits, beliefs, and personal experiences.