The Connecting Company uses the percent of sales method of accounting for uncollectible accounts receivable. During the current year, the following transactions occurred:
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.
Definitions:
Straight-Line Basis
A method of calculating depreciation or amortization by evenly allocating the cost of an asset over its useful life.
Salvage Value
The estimated value remaining in an asset after it has served its purpose.
Depreciation Expense
The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.
Useful Life
The estimated time period that an asset is expected to be usable, contributing to the revenue-generating activities of a business.
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