Question

Problem 8-1A A December 31, 2018. Pina Colada Corp. reported the following information on its balance sheet Accounts receivable $952.000 Les Allowance for doubtful accounts 84,000 During 2019, the company had the following transactions related to receivables 1. Se on tot 53.560.580 2. Sales returns and allowances 51.000 3. Collections of accounts receivable 2.501.000 4. write-offs of accounts receivable deemed uncollectible 87,000 5. Recovery of bad debts previously written off as uncollectible 28.000 Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receiva HAT Explana pino)

Answer 1

No	Particulars	Debit($)	Credit ($)
1	Accounts receivables account                                                       Dr                   To Sales account (Cash sales for $3,869,880)	3,869,880	3,869,880
2	Sales returns and allowance account                                          Dr                                                                                             To Accounts receivable account (Return of credit sale worth $ 51000)	51,000	51,000
3	Cash/Bank account                                                                         Dr        To Account Receivables account (Received cash from receivables of $2,831,000)	2,831,000	2,831,000
4	Bad and doubtful debts accounts                                               Dr        To Accounts Receivables account (Witten down accounts receivable worth $87,00000	87,000	87,000
5	Recovery of bad debts                                                                  Dr       To Profit and loss account (Bad debts recovered worth $ 28,000)	28,000	28,000

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NOTE

Please note no.5 transactions ,the amount recovered form bad debts which are previously written down is directly credited to Profit and loss account .

DR                                                                 ACCOUNT RECEIVABLE ACCOUNT                                                         CR      

Date	Particulars	Amount ($)	Date	Particulars	Amount ($)
1/1/2019	To Opening balance	952,000	2	By Sales returns and allowance	51,000
1	To sales	3,869,880	3	By cash account	2,831,000
			4	By Bad and doubtful debts	87,000
				By Balance	1,852,880

DR                                                       

DR ALLOWANCE FOR DOUBTFUL ACCOUNTS CR   

Date	Particulars	Amount ($)	Date	Particulars	Amount ($)
			1/1/2019	Opening balance	84,000
	To Balance (closing)	356,880	1	By Bad and doubtful debts account	272,880

No	Accounts Titles and Explanation	Debit($)	Credit($)
1	Bad and doubtful accounts                                                             Dr            To Allowance for doubtful accounts (Written down the accounts which are expected to be bad worth $272,880)	272,880	272,880
2	Profit and loss account                                                                        Dr         To Bad debts written-off accounts (Transfer entry of bad debts to Profit and loss account )	272,880	272,880