Question

Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recor3. For situations (a)-(c) in requirement 2 albove, what would be the net amount of accounts receivable reported in the 2021 bRequired 1 Required 2 Required 3 Prepare the year-end adjusting entry for bad debts. (If no entry is required for a transactiComplete this question by entering your answers in the tabs below. Required 1 Required 3 Required 2 For situations (a)-(c) in

1 0
Add a comment Improve this question Transcribed image text
Answer #1

Solution 1:

Journal Entry 1 - Raintree Cosmetic Company
Event Particulars Debit Credit
1 Allowance for doubtful accounts Dr $55,000.00
               To Accounts receivables $55,000.00
(To written of accounts receivables)
2 Accounts receivables Dr $4,600.00
               To Allowance for doubtful accounts $4,600.00
(To reinstate account previously written off)
3 Cash Dr $4,600.00
               To Accounts receivables $4,600.00
(To record collection of accounts previously written off)

Solution 2:

Ending balance in accounts receivables = Beginning receivables + Credit sales - Collection - Write off

= ($512,000 + $46,000) + $1,830,000 - $1,910,000 - $55,000

= $423,000

Ending balance in allowance for doubtful accounts before adjusting entry = Beginning balance - Write off + Bad debts recovered previously written off

= $46,000 -  $55,000 + $4,600 = $4,400 debit

Computation of Allowance for Uncollectible Accounts
Ageing % of year end receivables in Group Accounts Receivables % Uncollectible Required Allowance
0-60 days 60% $253,800 3% $7,614
61-90 days 10% $42,300 5% $2,115
91-120 days 20% $84,600 25% $21,150
Over 120 days 10% $42,300 45% $19,035
Total $423,000 $49,914
Journal Entry 2 - Raintree Cosmetic Company
Event Particulars Debit Credit
a Bad debts Expense Dr ($1,830,000*2%) $36,600.00
               To Allowance for doubtful accounts $35,800.00
(To record bad debts expense)
b Bad debts Expense Dr ($423,000*10% + $4,400) $46,700.00
               To Allowance for doubtful accounts $46,700.00
(To record bad debts expense)
c Bad debts Expense Dr ($49,914 + $4,400) $54,314.00
               To Allowance for doubtful accounts $54,314.00
(To record bad debts expense)

Solution 3:

a. Net accounts receivables = $423,000 - ($36,600 - $4,400) = $390,800

b. Net accounts receivables = $423,000 - $42,300 = $380,700

c. Net accounts receivables = $423,000 - $49,914 = $373,086

Add a comment
Know the answer?
Add Answer to:
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for...

    Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $33,000 $ 447,000 During 2021, credit sales were $1,765,000, cash collections from customers $1,845,000, and $38,000 in accounts receivable were written off. In addition, $3,300 was collected from a customer whose account was written...

  • Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for...

    Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following: Current assets Receivables, net of allowance for uncollectible accounts of $36,000 $462,000 During 2021, credit sales were $1,780,000, cash collections from customers $1,860,000, and $41,000 in accounts receivable were written off. In addition, $3,600 was collected from a customer whose account was written off...

  • Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for...

    Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $30,000 $432,000 During 2021, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. In addition, $3,000 was collected from a customer whose account was written off...

  • Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for...

    Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: $ 487.000 Receivables, net of allowance for uncollectible accounts of $41,000 During 2021, credit sales were $1,805,000, cash collections from customers $1,885,000, and $50,000 in accounts receivable were written off. In addition, $4,100 was collected from a customer whose account was written...

  • Only #2b, c, and 3 please Raintree Cosmetic Company sells its products to customers on a...

    Only #2b, c, and 3 please Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $42,000 $ 492,000 During 2021, credit sales were $1,810,000, cash collections from customers $1,890,000, and $51,000 in accounts receivable were written off. In addition, $4,200 was collected from...

  • I just need help with requirement three! Raintree Cosmetic Company sells its products to customers on...

    I just need help with requirement three! Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $30,000 $432,000 During 2021, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. In addition, $3,000 was collected from...

  • It’s all problem 12 12. 1000 poants Raintree Cosmetic Company sells its products to customers on...

    It’s all problem 12 12. 1000 poants Raintree Cosmetic Company sells its products to customers on a credit bass. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year end The 2015 balance sheet disclosed the following Current assets Receivables, net of allowance for uncollectible accounts of $44,000 $502.000 During 2016, credit sales were $1,820,000, cash collections from customers $1,900,000, and $53,000 in wrilthen off in 2015 An aging of accounts receivable at...

  • Raintree Cosmetic Company sells its product to customers on a credit basis. An adjusting entry for...

    Raintree Cosmetic Company sells its product to customers on a credit basis. An adjusting entry for uncollectible accounts expense is recorded only at December 31, the company's fiscal year-end. The 2018 balance sheet disclosed the following: Current Assets: Accounts Receivable, net of allowance for uncollectible accounts of $30,000 $432,000 During 2018, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. An aging of receivable at December 31, 2018, reveals the following: Age...

  • Raintree Cosmetic Company sells its product to customers on a credit basis. An adjusting entry for...

    Raintree Cosmetic Company sells its product to customers on a credit basis. An adjusting entry for uncollectible accounts expense is recorded only at December 31, the company's fiscal year-end. The 2018 balance sheet disclosed the following: Current Assets: Accounts Receivable, net of allowance for uncollectible accounts of $30,000 $432,000 During 2019, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. An aging of receivable at December 31, 2019, reveals the following: Age...

  • Raintree Cosmetic Company sells its product to customers on a credit basis. An adjusting entry for...

    Raintree Cosmetic Company sells its product to customers on a credit basis. An adjusting entry for uncollectible accounts expense is recorded only at December 31, the company's fiscal year-end. The 2018 balance sheet disclosed the following: Current Assets: Accounts Receivable, net of allowance for uncollectible accounts of $30,000 $432,000 During 2018, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. An aging of receivable at December 31, 2018, reveals the following: Percentage...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT