ACCT210, Snudy Guide 2 equipment. The company reported the following information

Question

ACCT210, Snudy Guide 2 equipment. The company reported the following information on its balance sheet: ce Fishing Company is a company specializes in ice-fishing tools, gear and company uses allowance method for its receivables. At December 31.2010, the Accounts receivable Less: Allowance for doubtful accounts S600,000 $40,000 During year 2011, 1) Sales on credit, $2.600,000. 2) Collections of accounts receivable: $2,200,000. , the company had the following transactions related to its accounts receivables. Write-offs of accounts receivable deemed uncollectible: $35,000 G.e., it was confirmed tha customer cannot pay $35,000). Recovery of bad debts 4) previously written off as uncollectible: $5,000 i.e., A.J. Ice Fishing previously wrote off $5,000 from a customer, but eventually A.J. Ice Fishing collected such $5,000 from the customer.) Requirement I: Prepare journal entries for above 2011 transactions. Credit Debit Accounts Transaction

Explanation / Answer

1 Accounts receivable 2600000           Sales 2600000 Cash 2200000          Accounts receivable 2200000 Allowance for doubtful accounts 35000          Accounts receivable 35000 Accounts receivable 5000          Allowance for doubtful accounts 5000 Cash 5000          Accounts receivable 5000 2 Amount % uncollectible Allowance Current accounts 820000 1% 8200 1-30 days 100000 3% 3000 31-60 days 30000 6% 1800 61-90 days 10000 12% 1200 Over 90 days 5000 30% 1500 Total 965000 15700 Ending balance in allowance for doubtful accounts = $15700 Dec-31-11 Bad debts expense 5700 =15700-(40000-35000+5000)          Allowance for doubtful accounts 5700

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