Instructor-Turck 4. ICHIRO COMPANY: Start each problem on a new sheet of paper (

Question

Instructor-Turck 4. ICHIRO COMPANY: Start each problem on a new sheet of paper (10) SupEx (hecelvalesdoc ote: Ichiro management team estimates the percentage of uncollectible credit sales 1. Transactions: (c) Unfortunately, $35,000 in uncollectible accounts had to be written on- During 2016, (a) sales on account were $3,200,000 and (b) cll to be 1.2 percent off total credin sales on account were $2.950,000 2. Set-up T-accts: Accounts were $430,000 and S31,700, respectively. Neatly, set up At the beginning of 2016, the balances for Gr 3. Post and Summarize: Post the entries above to the T-accounts off. Journalize these three transactions. ross Accounts Receivable and Receivable and the unadjusted balance T-accounts for Gross A/R and AIDA now the year-end balance of Accounts for Doubtfiul 4. Adjustments: Based on the Note above, make the year-end Adjusting Journal Entry to reco 5. 6. in Allowance for Doubtful Accounts. for 2016 Balance Sheet Presentation: Prepare the year-end balance sheet presentation for A/R. Doubtful Accounts; and A/R, net at the end of 2017: On January 13, 2017, Alex Inc., a customer, filed for ba 2016 and at the end of 2015. (i.e., present comparativ e balance sheet paying the $750 due to Ichiro Co. Prepare the necessary journal entry y, and alerted Ichiro Co. that it would not be 5. Harris Digital Co. reported the following information on its balance sheet as of December 31,2014 Accounts Receivable, gross Less: Allowance for Doubtful Accounts70,000 $960,000 Accounts Receivable, net $890,000 Instructions: a. For 2015, prepare the journal entries to record the following five transactions related to receivables. Assume Harris Digital offers no cash discounts for early payments. $3,200,000 50000 Sales to customers on Account and allowances from customers

Explanation / Answer

Answer 1 & 4 & 6. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2016 1-a Accounts Receivable                               Dr.    3,200,000.00    To Sales    3,200,000.00 (record the credit sales) 1-b. Cash                                                                Dr.    2,950,000.00    To Accounts Receivable    2,950,000.00 (Record the cash collected from customers) 1-c. Allowance for Doubtful Accounts       Dr.          35,000.00    To Accounts receivable          35,000.00 (record the accounts receivable written off) 4 Bad Debt Expenses                                  Dr.          41,700.00     To Allowance for Doubtful Accounts          41,700.00 (record the Bad Debt Expenses ) 2017 6 Allowance for Doubtful Accounts       Dr.                750.00    To Accounts receivable                750.00 (record the accounts receivable written off) Answer 2 & 3. Accounts Receivables To Balance b/f        430,000.00 By Cash    2,950,000.00 To Sales    3,200,000.00 By Allowance for DA          35,000.00 By Balance c/f        645,000.00    3,630,000.00    3,630,000.00 Allowance for Doubtful Accounts To A/R written off          35,000.00 By Balance b/f          31,700.00 To Balance C/f          38,400.00 By Bad debts (Bal. Fig.)          41,700.00 (1.20% X $3,200,000)          73,400.00          73,400.00 Answer 5. Balance Sheet (Partial) Current Assets Accounts Receivables    645,000.00 Allowance for Doubtful Accounts    (38,400.00) Net Accounts Receivable    606,600.00

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