Question

At January 1, 2018, Purple Mountain Flagpoles had Accounts Receivable of $27,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Purple Mountain Flagpoles recorded the following: (Click the icon to view the transactions.) Read the requirements. Requirement 1. Journalize Purple's transactions that occurred during 2018. The company uses the allowance method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) (a.) Sales of $182,000 ($158,000 on account; $24,000 for cash). Ignore Cost of Goods Sold. (Prepare a single compound journal entry.) Date Accounts and Explanation Debit | Credit i More Info 2018 a. Sales of $182,000 ($158,000 on account; $24,000 for cash). Ignore Cost of Goods Sold. Collections on account, $133,000. c. Write-offs of uncollectible receivables, $2,300. Print Done (b.) Collections on account, $133,000. Date Accounts and Explanation Debit | Credit 2018 i Requirements 1. 2. 3. Journalize Purple's transactions that occurred during 2018. The company uses the allowance method. Post Purple's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. Journalize Purple's adjustment to record bad debts expense assuming Purple estimates bad debts as 4% of credit sales. Post the adjustment to the appropriate T-accounts. Show how Purple Mountain Flagpoles will report net accounts receivable on its December 31, 2018, balance sheet. (c.) Write-offs of uncollectible receivables, $2,300. Date Accounts and Explanation Debit Credit 4. 2018 Print Done

Answer 1

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Requirement 1
Date	Accounts	Debit	Credit
2018	Cash	$             24,000
	Accounts Receivable	$           158,000
	Sales Revenue		$   182,000
	(To record sales)
2018	Cash	$           133,000
	Accounts Receivable		$   133,000
	(To record cash received)
2018	Allowance for Bad debt expense	$               2,300
	Accounts Receivable		$        2,300
	(To record write off)
Requirement 2
Accounts Receivable
Debit		Credit
Beginning	$                                                                                27,000	b	$   133,000
a	$                                                                             158,000	c	$        2,300
Ending Balance	$                                                                                49,700
Allowance for doubtful accounts
Debit		Credit
c	$                                                                                  2,300	Beginning	$        3,000
		Ending	$            700
Requirement 3
Date	Accounts	Debit	Credit
2018, Dec 31	Bad Debt Expense	$               6,320
	Allowance for bad debt expense		$        6,320
	(To record bad debt expense) $158,000*4%
Accounts Receivable
Debit		Credit
Unadjusted	$                                                                                49,700
Adjusted	$                                                                                49,700
Allowance for doubtful accounts
Debit		Credit
		Unadjusted	$            700
		Dec 31	$        6,320
		Ending	$        7,020
Bad Debt Expense
Debit		Credit
Dec 31 2018	$                                                                                  6,320
Ending	$                                                                                  6,320
Requirement 4	Current Assets:
	Accounts Receivbale	$             49,700
	Less: Allowance for bad debt expense	$             (7,020)	$      42,680