Journalize Various Accounts Receivable Transactions the balance sheet of Starsky
ID: 2384638 • Letter: J
Question
Journalize Various Accounts Receivable Transactions the balance sheet of Starsky Company at December 31, 2010, includes the following.Notes receivable $ 36,000
Accounts receivable 182,100
Less: Allowance for doubtful accounts 17,300 200,800
Transactions in 2010 include the following.
1. Accounts receivable of $138,000 was collected including accounts of $60,000 on which 2% sales discounts were allowed.
2. $5,300 was received in payment of an account which was written off the books as worthless in 2010.
3. Customer accounts of $17,500 were written off during the year.
4. At year-end the Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.
Prepare all journal entries necessary to reflect the transactions above.
Explanation / Answer
1. Accounts receivable of $138,000 was collected including accounts of $60,000 on which 2% sales discounts were allowed. 31Dec2010 Cash Dr 136,800 Sales Disc Dr 1200 Acct Rxable Cr 138,000 (Sales disc = 2%*60000 = 1200. Cash Rxd = 138000-1200 = 136,800) 2. $5,300 was received in payment of an account which was written off the books as worthless in 2010. 31 Dec 2010 Cash Dr 5300 Acct Rxable Cr 5300 31 Dec 2010 Acct Rxable Dr 5300 Allowance for doubtful accounts Cr 5300 3. Customer accounts of $17,500 were written off during the year. 31 dec 2010 Allowance for doubtful accounts Dr 17,500 Acct Rxable Cr 17,500 4. At year-end the Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable. Bal in Allowance for doubtful accounts Cr 17,300 Add: Allowance for doubtful accounts Cr 5300 Less : Allowance for doubtful accounts Dr 17,500 ---------------------------------------------------------- Bal Remaining in Allowance for doubtful accounts Cr 5,100 So Addl Prov needed is Cr 14,900 31 Dec 2010 P&L Acct Dr 14,900 Allowance for doubtful accounts Cr 14,900
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