Raintree Cosmetic Company sells its products to customers on a

Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company’s fiscal year-end. The 2020 disclosed the following:

Current assets:
Receivables, net of allowance for uncollectible accounts of $30,000 …..$432,000

During 2021, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in were written off. In addition, $3,000 was collected from a customer whose account was written off in 2020. An aging of at December 31, 2021, reveals the following:

Required:
1. Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.
2. Prepare the year-end adjusting entry for bad debts according to each of the following situations:
a. Bad debt expense is estimated to be 3% of credit sales for the year.
b. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of to the amount of cash expected to be collected. The allowance for uncollectible accounts is determined by an aging of For situations (a)–(c) in requirement 2 above, what would be the net amount of reported in the 2021 balance sheet?

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