Problem 9-1A At December 31, 2016, House Co. reported the following information

Question

Problem 9-1A At December 31, 2016, House Co. reported the following information on its balance sheet Accounts recelvable Less: Allowance for doubtful accounts $968,400 78,400 During 2017, the company had the following transactions related to receivables. 1. Sales on account 2. Sales returns and allowances 3. Collections of accounts receivable 4. Write-offs of accounts receivable deemed uncollectible 5. Recovery of bad debts previously written off as uncollectible28,100 $3,713,900 50,800 2,804,000 90,600 Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. amount is entered. Do not indent manually,) No Account Titles and Explanation Debit Credit 1. 2.

Explanation / Answer

No Account Titles and Explanation Debit Credit 1 Accounts Receivable $3,713,900 To Sales $3,713,900 (Being sales on account) 2 Sales returns and allowances $50,800 To Accounts Receivable $50,800 (Being sales returns and allowances) 3 Cash $2,804,000 To Accounts Receivable $2,804,000 (Being cash received from customers on account) 4 Accounts Receivable $90,600 To Allowance for doubtful accounts $90,600 (Being write-offs of accounts receivable) 5 Cash $28,100 To Accounts Receivable $28,100 (Being recovery of bad debt) Accounts Receivable Op Bal $968,400 2 $50,800 1 $3,713,900 3 $2,804,000 5 $28,100 4 $90,600 5 $28,100 Bal $1,736,900 Allowance for Doubtful Accounts 4 $90,600 Op Bal $78,400 5 $28,100 Bal $15,900 Balance Before Adjustment $15,900 Balance needed $115,000 Adjustment required $99,100 Journal Entry Bad Debt Expense $99,100 To Allowance for doubtful accounts $99,100 Accounts Receivable turnover ratio = Sales/Accounts Receivable $3713900/1736900 2.14 times

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