9:12 PM 41% edugen.wileyplus.com CALCULATOR PRINTER VERSION BACK NEXT Exercise 8

Question

9:12 PM 41% edugen.wileyplus.com CALCULATOR PRINTER VERSION BACK NEXT Exercise 8-3 At the beginning of the current period, Engseth Corp, had balances in Accounts Receivable of $234,100 and in Allowance for Doubtful Accounts of $8,100 (credit). During the period, it had net credit sales of $805,000 and collections of $772,000. It wrote off as uncollectible accounts receivable of $7,100. However, a $4,400 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $24,400 at the end of the period. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Prepare the entries to record sales and collections during the period. (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (c) Prepare the entries to record the recovery of the uncollectible account during the period (d) Prepare the entry to record bad debts expense for the period. nts Receivable 805 80 Sales Revenue (To record sales) 772 772 Accounts Receivable dy Receivable (c) Accounts Receivable Allowance for Doubtful (To reinstate account previously written off) Accounts Receivable 24400 (a)Bad Debts Expense

Explanation / Answer

Accounts receivable at end = Beginning +sales -write off -collected

                                           =   234100 + 805000+ -772000- 7100 = 260000

Allowance = 8100 + 24400 -7100 +4400 = 29800

Net realizable value = 260000- 29800 = 230200

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