On June 30 Flower Party Planners had a35,000 balance in Accounts Receivable and

Question

On June 30 Flower Party Planners had a35,000 balance in Accounts Receivable and a $3.299 credit balance in Allowance or uncollectible Accounts. During July Flower made credit sales o $192,000. July collections on account were $168 and write-offs of uncollectible receivables totaled $2.840 uncollectible-accounts expense is estimated as 2% of credit sales. No sales returns are expected. Ignore cost of goods sold. Read the recuirements Requirement 1. Journalize sales, collections, write-ofts of uncollectibles, and uncollectible-account expense by the allowance method during July. Explanations are not required. (Record debits tirst, then credits. Exclude explanations from any joumal entries.) (a) Begin by recording the journal entry for July sales. Journal Entry Requirements Date Accounts Debit Credit 1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during July Explanations are not required. 2. Show the ending balances in Accounta Receivable, Allowance for (b) Next, journallze the collections on account. Uncollectible Accounts, and Net Accounts Receivable at July 31. How much does Flower expect to collect? Journal Entry 3. Show how Flower Party Planners will repert accounts recelvable and net Date Accounts Debit Credit sales on its July 31 balance sheet and income statement for the month ended July 31 Print Done

Explanation / Answer

Journal entries: S.no. Accounts title and explanations Debit $ Credit $ a. Accounts receivable Dr. 192000      Sales revenue 192000 b. Cash account Dr. 168000      Accounts receivable 168000 c. Allowance for Uncollectibles Account Dr. 2840      Accounts receivable 2840 d. Bad debts expense Dr. (192000*2%) 3840     Allowance ffor Uncollectible Accounts 3840 Req 2. Accounts Receivable Account Balance 35,000 Cash account 168,000 Sales revenue 192,000 Allowance for Uncollectibles 2,840 Balance 56,160 Allowance ffor Uncollectible Accounts Accounts receivable 2,840 Balance 3,299 Bad debts expense 3,840 Balance 4,299 The Net accounts receivable: Accounts receivable (Gross) 56160 Less: Allowance for uncollectible accounts 4299 Accounts receivable (Net) 51861 Flower expects to relaise $ 51861 Req 3. Balance Sheet (Partial) Accounts receivable (Gross) 56160 Less: Allowance for uncollectible accounts 4299 Accounts receivable (Net) 51861 Income Statement: Bad debt expenses 3840

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