Learning Objectives 1, 3 its December 31,2018, balance sheet. P9-30A ccounting f

Question

Learning Objectives 1, 3 its December 31,2018, balance sheet. P9-30A ccounting for uncollectible accounts using the allowance method u 2. Net AR $119,800 (percent Delta W and 2019: atches completed the following selected transactions during 2018 2018 Estimated that bad debts expense for the year was 2% of credit sales of $450,000 and recorded that amount as expense. The company uses the allowance method. Dec. 31 31 2019 Made the closing entry for bad debts expense. Sold merchandise inventory to Mack Smith, $400, on account. Ignore Cost of Goods Sold. Jan. 17 Wrote off Mack Smith's account as uncollectible after repeated efforts to collect from him. Jun. 29 Received $400 from Mack Smith, along with a letter apologizing for being so late. Reinstated Smith's account in full and recorded the cash receipt. Aug. 6 Made a compound entry to write off the following accounts as uncollectible: Cam Carter, $1,400; Mike Venture, $1,200; and Russell Reeves, $400. Dec. 31 31 Estimated that bad debts expense for the year was 2% on credit sales of 31 Made the closing entry for bad debts expense. Requirements 1. Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assuming $510,000 and recorded the expense. the accounts begin with a zero balance. Record the transactions in the general journal (omit explanations), and post to the two T-accounts 2. Assume the December 31, 2019, balance of Accounts Receivable is $136,000. Show how net accounts receivable would be reported on the balance sheet at that date.

Explanation / Answer

Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Dec-18 Bad Debt Expenses                              Dr.      9,000.00 $450,000 X 2% To Allowance for Bad Debts      9,000.00 31-Dec-18 Income summary                                  Dr.      9,000.00 To Bad Debts Expenses      9,000.00 17-Jan-19 Accounts Receivable                           Dr.          400.00 To Sales          400.00 29-Jun-17 Allowance for Bad Debts                   Dr.          400.00 To Accounts Receivable          400.00 6-Aug-19 Accounts Receivable                           Dr.          400.00 To Allowance for Bad Debts          400.00 6-Aug-19 Cash                                                            Dr.          400.00 To Accounts Receivable          400.00 31-Dec-19 Allowance for Bad Debts                   Dr.      3,000.00 To Accounts Receivable      3,000.00 31-Dec-19 Bad Debt Expenses                              Dr.    10,200.00 $510,000 X 2% To Allowance for Bad Debts    10,200.00 31-Dec-19 Income summary                                  Dr.    10,200.00 To Bad Debts Expenses    10,200.00 Allowance for Bad Debts Bad Debts Expenses      9,000.00 31-Dec-18 31-Dec-18      9,000.00      9,000.00 31-Dec-18 End. Bal.      9,000.00 End Bal.                   -   Beg. Bal      9,000.00 Beg. Bal                   -   29-Jun-17        400.00          400.00 6-Aug-19 31-Dec-19    10,200.00    10,200.00 31-Dec-19 31-Dec-19    3,000.00    10,200.00 31-Dec-19 End. Bal.    16,200.00 End Bal.                   -   Answer 2. Accounts Receivable          136,000 Less: Allowance for Doubtful Accounts          (16,200) Net Accounts Receivable - Dec 31, 2019          119,800

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