Fleming Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 1% of net credit sales will eventually be uncollectible. Selected account balances at December 31, 2014, and December 31, 2015, appear below: 12/31/14 12/31/15
Net Credit Sales $400,000$500,000
Accounts Receivable 60,000 80,000
Allowance for Doubtful Accounts 5,200 ?
Record the following events in 2015:
Aug. 10Determined that the account of Sue King for $800 is uncollectible.
Sept. 12Determined that the account of Tom Young for $3,700 is uncollectible.
Oct. 10Received a check for $500 as payment on account from Sue King, whose account had previously been written off as uncollectible. She indicated the remainder of her account would be paid in November.
Nov. 15Received a check for $300 from Sue King as payment on her account.
1. Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2015.
2. What is the balance of Allowance for Doubtful Accounts at December 31, 2015?

1. (a) Aug. 10

Dr Allowance for Doubtful Accounts $800

Accounts Receivable—Sue King $800

Sept. 12

Dr Allowance for Doubtful Accounts $3,700

Cr Accounts Receivable—Tom Young $3,700

Oct. 10

Dr Accounts Receivable— Sue King $800

Cr Allowancefor Doubtful Accounts $800

Dr Cash $500

Cr Accounts Receivable— Sue King $500

Nov. 15

Dr Cash $300

Cr Accounts Receivable— Sue King $300

Dec. 31

Dr Bad Debt Expense $5,000

Cr Allowance for Doubtful Accounts $5,000

2. $6,500

Explanation:

1. Preparation of the adjusting journal entry to record the bad debt provision for the year ended December 31, 2015.

(a) Aug. 10

Dr Allowance for Doubtful Accounts $800

Accounts Receivable—Sue King $800

(To write off Sue King account)

Sept. 12

Dr Allowance for Doubtful Accounts $3,700

Cr Accounts Receivable—Tom Young $3,700

(To write off Tom Young account)

Oct. 10

Dr Accounts Receivable— Sue King $800

Cr Allowancefor Doubtful Accounts $800

(To reinstate Sue King account previously written off)

Dr Cash $500

Cr Accounts Receivable— Sue King $500

(To record collection on account)

Nov. 15

Dr Cash $300

Cr Accounts Receivable— Sue King $300

(To record collection on account)

Dec. 31

Dr Bad Debt Expense $5,000

($500,000 ×1%)

Cr Allowance for Doubtful Accounts $5,000

(To record estimate of uncollectible accounts)

2. Calculation to determine the balance of Allowance for Doubtful Accounts at December 31, 2015

Balance of Allowance for Doubtful Accounts at December 31, 2015=$5,200 – $800 – $3,700 + $800 + ($500,000*1%)

Balance of Allowance for Doubtful Accounts at December 31, 2015=$5,200 – $800 – $3,700 + $800 + $5,000

Balance of Allowance for Doubtful Accounts at December 31, 2015=$6,500

Therefore the balance of Allowance for Doubtful Accounts at December 31, 2015 is $6,500.

i would say their habit of breaking down.

answer(c) factors of production;