The Arcand Co. Ltd. has estimated its bad debts at 1 per cent of net credit sales. During 2016, Arcand decided to calculate the required balance for the allowance for doubtful accounts at year-end, December 31, by ageing its accounts receivable. The review suggested a required balance of $7,200. The following data, which already have been recorded in the company’s general ledger, are also available:
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2015 |
2016 |
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Accounts written off |
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On March 14, 2015 (Boven) |
$600 |
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On March 30, 2016 (Seaton) |
$300 |
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Recoveries of accounts written off |
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On June 5, 2016 (Boven) |
400 |
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The Allowance for Doubtful Accounts general ledger account reported the following balances: January 1, 2015—$1,500 credit; January 1, 2016—$3,900 credit.
Required: Prepare journal entries to record
- The amount of bad debt expense for the year 2015
- The bad debt expense on December 31, 2016
- The collection from Boven on June 5, 2016.
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