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
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 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 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 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...
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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 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 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 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 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...