Prepare a schedule calculating the balance in Reimer
At January 1, 2015, the credit balance of Reimer Corp.’s allowance for doubtful accounts was $575,000. During 2015, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2015 were $16 million, of which 75% were on account. Based on the information available at the time, the 2015 bad debt expense was estimated to be 1% of net credit sales. During 2015, uncollectible receivables amounting to $40,000 were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2015, based on a review of the aged accounts receivable, the allowance for doubtful accounts would be properly measured at $500,000.
Required:
a. Prepare a schedule calculating the balance in Reimer Corp.’s allowance for doubtful accounts at December 31, 2015. Prepare any necessary journal entry at year-end to adjust th
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