Question

Requirement 1. Journalize Windy'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 $178,000 ($162,000 on account: $16,000 for cash). Ignore Cost of Goods Sold. (Prepare a single compound journal entry) Date Accounts and Explanation Debit Credit 0 Requirements 2018 1. Journalize Windy's transactions that occurred during 2018. The company uses the allowance method. Post Windy's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. Journalize Windy's adjustment to record bad debts expense assuming Windy estimates bad debts as 12% of accounts receivable. Post the adjustment to the appropriate T-accounts. Show how Windy Mountain Flagpoles will report net accounts receivable on its December 31, 2018, balance sheet. (b.) Collections on account, $124,000. 4. Date Accounts and Explanation Debit Credit 2018 i More Info a. Sales of $178,000 ($162,000 on account: $16,000 for cash). Ignore Cost of Goods Sold. b. Collections on account, $124,000. c. Write-offs of uncollectible receivables, $2,300. (c.) Write-offs of uncollectible receivables, $2,300. Date Accounts and Explanation Debit | Credit Print Done 2018

Answer 1

1.
a.

Account Titles	Debit	Credit
Cash	$          16,000
Accounts Receivable	$      1,62,000
Sales Revenue		$      1,78,000

b.

Account Titles	Debit	Credit
Cash	$      1,24,000
Accounts Receivable		$      1,24,000

c.

Account Titles	Debit	Credit
Allowance for Bad Debts	$            2,300
Accounts Receivable		$            2,300

2.

Accounts Receivable
Sales	$      1,78,000	$      1,24,000	Cash
		$            2,300	Allowance for Bad Debts
Ending Balance	$          51,700

Allowance for Bad Debts
Accounts Receivable	$            2,300
Ending Balance		$            2,300

3.
Ending Balance Accounts Receivable = $51700 x 12% = $6204
Bad debt expense = $6204 + $2300 = $8504

Account Titles	Debit	Credit
Bad Debt Expense	$            8,504
Allowance for Bad Debts		$            8,504

Allowance for Bad Debts
Unadjusted Balance	$            2,300	$            8,504	Bad Debt Expense
Ending Balance		$            6,204

4.

Accounts Receivable	$          51,700
Less Allowance for Bad Debts	$          -6,204	$          45,496