Accounting for uncollectible accounts using the allowance method
This problem continues the Draper Consulting situation from Problem of Chapter 7. Draper reviewed the receivables list from the January transactions. Draper identified on February 15 that a customer was not going to pay his receivable of $200 from December 9. Draper uses the allowance method for receivables, estimating uncollectibles to be 5% of January credit sales. Requirements
1. Journalize the entry to record and establish the allowance using the percentage method for January credit sales.
2. Journalize the entry to record the identification of the customer’s bad debt.
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