3 Record the following transactions for Haire Company 4 5 Year 1 Net sales on ac
ID: 2596957 • Letter: 3
Question
3 Record the following transactions for Haire Company 4 5 Year 1 Net sales on account for the period were $650,000. Haire Company uses the percentage of sales method of estimating uncollectible accounts. Phare estimates that 3% of net sales are uncollectible. The credit balance in Allowance for Bad Debts is $2,000. 6 8 Year 2 The $2,500 account receivable of Myron Elph was determined to be uncollectible and was written off 9 10 Notice was received that Scotty Kats, a customer, was bankrupt His balance of $1,000 was written off Keinstatea r. nnames, account tnat naa Deen wrmen in tne preceding year as arrount 12 15-Jul uncollectible. Entered the receipt of $750 cash as full settlement of Knames 13 14Explanation / Answer
Notes: 1 CALCULATION OF PROVISION OF BAD DEBTS FOR THE YEAR END Net Sales = $ 6,50,000 3 % of Net Sales are uncollectable = $ 19,500 (3 % of $ 650,000) Notes: 2 Allowance for Doubtfull Debts (Opening Bal.) $ 3,000 Credit Balance as per Note 1 in Allowance for Doubtful Debts $ 19,500 Credit Need to be made the prvision for allowance $ 16,500 Credit Journal Entries Date Account Title and explanation Debit Credit Bade Debt Expenses $ 16,500 Year 1 Dec ,31 To Allowance for Doubtful Debts $ 16,500 (To Record the Bad Debt provision for the year ) Allowance for Doubtful Debts $ 2,500 Year 2, 12 - feb To Account Receivable $ 2,500 (To Record the allowance for Doubtfull Debts for Myron) Allowance for Doubtful Debts $ 1,000 Year 2, 04 - May To Account Receivable $ 1,000 (To Record the allowance for Doubtfull Debts for Myron) Year 2, 15 - July Account Receivable $ 750 To Allowance for Doubtful Debts $ 750 (To Record the AR for earlier write off) Year 2, 15 - July Cash Account $ 750 To Account Receivable $ 750 (To Record the receipts of the Cash against write off)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.