Stiller Company Uses the Allowance Method to Account for Bad

question 9

Essay

Stiller Company uses the allowance method to account for bad debts.
In the first year of operations (2014),Stiller sold $540,000 of merchandise on credit,including a $2,500 sale to Bubba Long.On December 31,2014,it provided an addition to its allowance for doubtful accounts equal to 1.8% of its credit sales.On June 1,2015,Stiller wrote off as uncollectible the $2,500 account of Bubba Long; and on December 25,2015 Bubba Long unexpectedly paid his account in full.
Prepare the journal entries that Stiller Company should make:
(a)On December 31,2014,to increase the allowance for doubtful accounts.
(b)On June 1,2015,to write off the bad debt.
(c)On December 25,2015,to record the unexpected collection from Bubba Long.

---

Definitions:

Joshua Johnston

An African American portrait painter active in the late 18th and early 19th centuries, known for his work depicting both black and white subjects.

Literary Genre

A category of literary composition characterized by similarities in form, style, or subject matter.

Benjamin Banneker

An African American almanac author, surveyor, naturalist, and farmer known for his work on early Washington D.C. city plans and for advocating civil rights in the 18th century.

Mathematics

The abstract science of number, quantity, and space, either as abstract concepts (pure mathematics), or as applied to other disciplines such as physics and engineering (applied mathematics).