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The Gadzooks Chip Company offers credit terms to its customers. Atthe end of 2009, accounts receivable totaled $2,223,000. Theallowance method is used to account for uncollectible accounts. Theallowance for uncollectible accounts had a credit balance of$68,000 at the beginning of 2009 and $46,200 in receivables waswritten off during the year as uncollectible. No previously writtenoff receivables were collected. The company estimates bad debts byapplying a percentage of 3% to accounts receivable at the end ofthe year.

Required:
1. Prepare journal entries to record the write-off of receivablesand the year-end adjusting entry for bad debt expense.
2. How would accounts receivable be shown in the 2009 year-endbalance sheet?

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Irving Heathcote
Irving HeathcoteLv2
28 Sep 2019

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