StorageTek Corporation gathered the following information from its accounting records for the year ended December 31, 2014, prior to adjustment:
Allowance for Uncollectible Accounts, prior to
StorageTek Corporation uses the allowance method of accounting for bad debts and estimates bad debts at 2.5% of net credit sales.
Required:
a. Prepare the adjusting entry on December 31, 2014.
b. Determine the balance in the Allowance for Uncollectible Accounts account after the adjusting entry is recorded.
c. Show how the receivables would be reported on the December 31, 2014, balance sheet for StorageTek Corporation.

Question

StorageTek Corporation gathered the following information from its accounting records for the year ended December 31, 2014, prior to adjustment:
  Allowance for Uncollectible Accounts, prior to
  StorageTek Corporation uses the allowance method of accounting for bad debts and estimates bad debts at 2.5% of net credit sales.
Required:
a. Prepare the adjusting entry on December 31, 2014.
b. Determine the balance in the Allowance for Uncollectible Accounts account after the adjusting entry is recorded.
c. Show how the receivables would be reported on the December 31, 2014, balance sheet for StorageTek Corporation.

Quizplus · Accepted Answer

The Answer of StorageTek Corporation gathered the following information from its accounting records for the year ended December 31, 2014, prior to adjustment:
  Allowance for Uncollectible Accounts, prior to
  StorageTek Corporation uses the allowance method of accounting for bad debts and estimates bad debts at 2.5% of net credit sales.
Required:
a. Prepare the adjusting entry on December 31, 2014.
b. Determine the balance in the Allowance for Uncollectible Accounts account after the adjusting entry is recorded.
c. Show how the receivables would be reported on the December 31, 2014, balance sheet for StorageTek Corporation.

StorageTek Corporation Gathered the Following Information from Its Accounting Records