Crystal Clear Cleaning uses the allowance method to

estimate bad #421

Crystal Clear Cleaning uses the allowance method to estimate bad debts. Consider the
following January transactions for Crystal Clear:Jan. 1 Performed cleaning service for Debbie's
D-list for $9,000 on account with terms 3/10, n/20.10 Borrowed money from High Roller Bank,
$20,000, is making a 180 day, 15% note.12 After discussions with Merry Cleaners, Crystal
Clear has determined that $275 of the receivable owed will not be collected. Wrote off this
portion of the receivable.15 Sold goods to Westford for $8,000 on account with terms 5/10,
n/30. Cost of Goods Sold was $400.28 Sold goods to Meaghan, Inc. for cash of $2,000 (cost
$350).28 Collected from Merry Cleaners, $275 of receivable previously written off.29 Paid cash
for utilities of $450.31 Created an aging schedule for Crystal Clear for accounts receivable.
Crystal Clear determined that $8,100 of receivables were 5% uncollectible, $9,775 of
receivables were 15% uncollectible, and $850 of receivables were 30% uncollectible. Crystal
Clear determined the total amount of estimated uncollectible receivables and adjusted the
Allowance for Bad Debts assuming a credit balance of $240 in the account. Requirements-
Prepare all required journal entries for Crystal Clear.-Show how net accounts receivable would
be reported on the balance sheet as of January 31, 2018.View Solution:
Crystal Clear Cleaning uses the allowance method to estimate bad

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