The Accounts Receivable balance for Lake, Inc. at December 31, 2017, was $ 20 comma 000. During 2018, Lake earned revenue of $ 454 comma 000 on account and collected $ 325 comma 000 on account. Lake wrote off $ 5 comma 600 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 5% of accounts receivable. Read the requirementsRequirement 1. Assume Lake had an unadjusted $ 2 comma 700 credit balance in Allowance for Bad Debts at December 31, 2018. Journalize Lake's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method.

The required journals are:

Debit Bad debt expense                                          $10,070

Credit Allowance for doubtful accounts                 $10,070

(To record bad debt for the year)

Explanation:

To understand the effects of the transactions, we need to journalize as follows:

Debit Accounts receivable                                    $454,000

Credit Sales revenue                                             $454,000

(To record sales transaction on account)

Debit Cash                                                             $325,000

Credit Accounts receivable                                  $325,000

(To record collections on account)

Debit Allowance for doubtful accounts                   $5,600

Credit Accounts receivable                                     $5,600

(To record write-off of accounts receivable)

With the above journals, the balance in accounts receivable will be: $20,000 + $454,000 - $325,000 - $5,600 = $143,400. The 5% of $143,400 will be $7,170.

The effect of the write-off was to throw the unadjusted allowance for doubtful account into debit as $2,700 - $5,600 = $2,900. The required bad debt expense will $10,070 ($7,170 + $2,900).

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1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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