Problem 14 Sear, Roebuck & Co. Allowance for Doubtful Accounts

Problem 14 15 points

Sear, Roebuck & Co. estimated it would loose as bad debts an amount equal to one half

of 1% of it’s $450,000 credit sales made for the 2012. On December 31, 2012, at the end

of the annual accounting period, Sears, Roebuck & Co. made an entry to it’s Allowance for

Doubtful Accounts equal to the estimate. Prior to this entry the Allowance for Doubtful

Accounts had a debit balance of $600. On April 1, 2013, Sears, Roebuck & Co. decided

the $340 account of Ron Koplen was uncollectible and wrote it of as a bad debt. Two

months later, on June 1, Ron Koplen paid in full Sear, Roebuck & Co. Give the entries

required by Sears for the following transactions:

A) December 31,2012

B) April 1, 2013

C) June 1, 2013

D) What is the balance in the Allowance for Doubtful Accounts as of January 1, 2013?