a) prepare a Finansial statements effect template entry to record accounts recei

Question

a) prepare a Finansial statements effect template entry to record accounts receivable written off as uncollectible in 2012

b) prepare the FSET entry to record the provision for doubtful accounts (dab debts expense) for 2012.

c) Calculate gross receivables for the years given, and then determine the allowance for doubtful accounts as a percentage of the gross receivables.

from the income statement: Net sales 729373 678960 from the balance sheet: Accounts receivable, net 14919 15036 Customer deposits 65465 62649 from the disclosure on Allowance fro doubdful accounts: Balance at the beginning of period 1171 1160 Additions (reductions) charged to income 9 11 Adjustments or deductions -70 0 Balance at the end of period 1110 1171

Explanation / Answer

a) Bad debts a/c dr. 70

Dbtors a/c 61

b)BAd debts a/c dr. 61

to Provision for Bad debts 61

c)1110/ (14919+9)= 7.4%

1171/(15036 + 11) = 7.7%

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