The Accounts Receivable balance and Allowance for Bad Debts for Turning Leaves Furniture Restoration at December 31, 2015, was $10,800 and $2,000 (credit balance). During 2016, Turning Leaves completed the following transactions:
a. Sales revenue on account, $265,800 (ignore Cost of Goods Sold).
b. Collections on account, $220,000.
c. Write-offs of un-collectibles, $6,100.
d. Bad debts expense of $5,000 was recorded.
1. Journalize Turning Leaves’s transactions for 2016 assuming Turning Leaves uses the allowance method.
2. Post the transactions to the Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense T-accounts, and determine the ending balance of each account.
3. Show how accounts receivable would be reported on the balance sheet at December 31, 2016.