Question

illustste t accounts for accounts receivable and allowance for bad debts

A) On November 30, Penny Cohada $41.000 halange in Accounts Recivable and a $3,584 credit balance in the Allowance for Uncollectible Accounts. During December. Pey made credit sales of $200,000. December collections on account were $168.000, and write-offs of uncollectible accounts totaled $2.910. Uncollectible account expense is estimated as 15 of credit sales. No sales returns are expected and ignore cost of goods sold REQUIRED: Journalire les collections, write-offs of uncollectables and uncollectible account expense by the allowance method during December. Show the ending balances in Accounts Receivable and the Allowance for Uncollectible Accounts at December 31. Entry for Credit Sales: Accounts Receivable AC Dr. $200,000 TO credit sales $200 poo Entry for Collections Cash All Dr. $100.000 TO ACCOUNTS Receivable AC 8168,000 Entry for Write-Offs: Profit & Less accounts Dr. $2910 TO Allowance of uncollectible Accounts $2,910 Adjusting Entry for Bad Debts: Allowance for uncollectible Accounts Dr. $3584 To write-off of uncollectible ACC $2,900 to bad debts (3,584-2,910)=674 Illustrate T-Accounts for A/R and Allowance for Bad Debts:

Answer 1

Entry for credit sales:

Account Title and explanation	Debit	Credit
Accounts receivable	$200,000
Sales revenue		$200,000
[To record credit sales]

Entry for collections:

Account Title and explanation	Debit	Credit
Cash	$168,000
Accounts receivable		$168,000
[To record collections from customers]

Entry for Write-Offs:

Account Title and explanation	Debit	Credit
Allowance for uncollectible account	$2,910
Accounts receivable		$2,910
[To record write-off of uncollectible]

Adjusting Entry for Bad debts:

Account Title and explanation	Debit	Credit
Bad debt expense [200,000 x 1%]	$2,000
Allowance for uncollectible account		$2,000
[To record bad debt expense]

T-Accounts:

Accounts receivable
Beg.	$41,000	Cash	168,000
Sales revenue	$200,000	Allowance for uncollectible account (Write-off)	$2,910
End.	$70,090
Allowance for uncollectible account
Accounts receivable (Write-off)	$2,910	Beg.	$3,584
		Bad debt expense (Adj.)	$2,000
		End.	$2,674