The following information is available for a company as of January 1 st , 2015:
ID: 2416672 • Letter: T
Question
The following information is available for a company as of January 1st, 2015:
Accounts Receivable
$185,000
Allowance for Doubtful Accounts
(62,500)
Accounts Receivable (net)
122,500
The following events took place during 2015:
During the year, the company had credit sales of $256,700.
The company wrote off accounts worth $28,900 as uncollectible.
The company estimated bad debts as 3.5% of credit sales.
The company collected $286,000 of cash from accounts receivable.
A.1) Record the four events above that took place during 2015 in journal entry form
B.2) Determine the Accounts Receivable (net) amount as of December 31, 2015. Show your work.
Accounts Receivable
$185,000
Allowance for Doubtful Accounts
(62,500)
Accounts Receivable (net)
122,500
Explanation / Answer
1- accounts receivables debit 256700
credit sales 256700
2- allowances for doubtful debt debit 28900
credit accounts recivables 28900
3- bad and doubtful debts debit 8985
credit allowances for bad and doubtful debts 8985
4- cash debit 286000
credit bill recivables 286000
B-2 net balance of accounts receivables = 122500
credit sales = 256700
Balance in accounts receivables account= 122500+256700 = 379200
cash collected = 286000
balance in accounts receivables = 379200 - 286000 = 93200
balance in allowances for bad debts = 62500
allowance for the year = 8% of credit sales = 8985
total balance in allowance for bad debts = 62500 - 8985 = 42585
balance in bills receivables account = 93200 - 42585 = 50615
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.