Question

ford file and upload the file in the space provided at the bottom of the question box as your submitted ans tion Question 1 25 p The Jenko Company uses the percent of sales method of accounting for uncollectible accounts receivable. At the beginning of the current year, the Allowance for Doubtful Accounts had normal balance of $10,000. The following transactions took place during the current year: Sept. 7 Jenko Company determined that the $21,400 account receivable of the Helena Company was uncollectible and wrote it off. Dec. 31 Jenko Company estimates that 2% of its $2,200,000 of credit sales would be uncollectible. The Accounts Receivable Account had a balance of $1,250,000 Required: Parta. Prepare journal entries needed to account for the above information. Part b. Determine the balance of the Allowance for Doubtful Accounts at the end of the current yea Assume that the transactions above are the only transactions affecting this account during the year. Part c. Illustrate the impact (or explain the impact including location) on the Income Statement and the Balance Sheet of the above information.

Answer 1

Solutions Journal entries- Jenko company Date particulars Debit credit 7-sep $21400 Allowance for doubtful accounts To accounts receivables To write off receivables) $ 21400 31-Dec Bad debts expense 2200000 x 2.) To allowance for doubtful accounts $ 44000 $ 44000 (To record bad debts expense) b) the Balance in allowance for doubtful account at end of year = Beginning balance & Bad debts expense - Ending balance. = $10.000+ $44000 – $ 214:00 = $ suooo - $21400 = $ 32600

Jenko company Income statement (pastial) particulars amount. Bad debts expense $ 4yout Jenko company. sheet (pastial) Balance particulars amount $ 1250000 Accounts receivable, Gross | Less Allowance for doubtful accounts $32.600 Accounts receivables, net $ 12174oo