The given information pertains to Mountain High Campers.
A. Mountain High Campers predicts bad debt expense at 3/5% of credit sales. The company reported accounts receivable and allowance for the uncollectible accounts balances of 486,000 and 220 (cr) correspondingly, at Dec. 31, 2012. During the year 2013, Mountain High's credit sales and collections were 415,000 and 519,000 correspondingly, and 3,200 in bad accounts were written off.
1. Make the adjusting entry to record bad debt expense for 2013 (show supporting computations or use T accounts to support your answer).
2. Mountain High's accounts receivable at December 31, 2013, are________________.
3. Mountain High's adjusted allowance for the uncollectible accounts at December 31, 2013, is_________.
4. describe how the amount in A1 would vary if the allowance account had an ending balance on December 31, 2012, of 120 (dr).
B. Mountain High predicts bad debts on an analysis of receivables. The aging schedule estimates bad debts to be 3000.
C. Make a summary journal entry (all bad accounts written off in a single entry) if Mountain High had employed the direct prepare-off method of accounting for the uncollectible accounts.