Sig Co. began operations on January 1, 20X7. On December 31, 20X7, Sig provided for uncollectible accounts based on 1% of annual credit sales. On january 1, 20X8, Sigma changed its method of determining its allowance for uncollectible accounts by applying certain percentages to the accounts receivable aging as follows:
Sig Co. began operations on January 1, 20X7. On December 31, 20X7, Sig provided for uncollectible accounts based on 1% of annual credit sales. On january 1, 20X8, Sigma changed its method of determining its allowance for uncollectible accounts by applying certain percentages to the accounts receivable aging as follows:
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In addition, sigma wrote off all accounts receivable that were over one year old. The following additional information relates to the years ended December 31, 20X8, and 20X7:
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Required:
1. Prepare all journal entries for 20X7 and 20X8
2. Post to “T” accounts
3. Report your answers in the following Chart