Hello,
I need detailed solution for this question
Note: check attachments
Thank you
Part A - Journal Entries:
Sl.No. | Journal Enrty | Debit | Credit | |
c) | Cash A/c Dr | $24,000 | ||
To Accounts receivable A/c | $24,000 | |||
Being the amount recovered from the Customers) | ||||
d) | Bad and Doubtful Debts A/c Dr | $26,000 | ||
To Acounts Receivable A/c | $26,000 | |||
(Being several accounts were written off) | ||||
e) | Cash A/c Dr | $1,790,000 | ||
To Accounts receivable A/c | $1,790,000 | |||
(Being the amount received from customers) |
Part B:
2. Adjusting Entry for bad debts:
Estimated Bad Debts = 1% of Net Credit Sales =$2,046,000*1% = $20,460
Net Credit Sales = Credit Sales less Credit Sales Returns = ($2,800,000*75%) - ($108,000*50%) = $2,046,000
Name of the Account | Debit | Credit |
Allowance for doubtful Debts | $20,460 | |
Accounts Receivable Account | $20,460 |
3. Balance in Allowance for Doubtful Debts on the December 31,2020 is $20,460 and it is shown under the Aset Side of the balance sheet.
4. Bad debt Expense on the income Statement is $26,000 and it will be shown as an expenditure.
Part C : Adjusting Entry for bad debts
Estimated Bad debts is 3% of Outstanding Receivables = $230,000*3% = $6,900
Name of the account | Debit | Credit |
Allowance for doubtful debts | $6,900 | |
To accounts receivable A/c | $6,900 |
Calculations:
Accounts Receivable Account
Debit | Amount | Credit | Amount |
To Sales A/c | $2,100,000 | By sales Returns | $54,000 |
By Bad debts A/c | $26,000 | ||
By Cash A/c | $1,790,000 | ||
by Bal C/d | $230,000 | ||
Total | $2,100,000 | Total | $2,100,000 |
Allowance for Doubtful Accounts
Debit | Amount | Credit | Amount |
To Accounts receivable A/c | $6,900 | By bal c/d | $6900 |
Total | $6900 | Total | $6900 |
6.The balance of Allowance for doubtful debts is $ 6900 and it is shown under assets side.
7. The bad debt expense on the income statement is $ 26,000 and it is shown under expenditure side.
Hello, I need detailed solution for this question Note: check attachments Thank you mere to search...
please sir do it #/epub/sn_5b01#epubcfi(%2F6%2F336%5Bdata-uuid-bf682f07c16e4fad819d46cddcdb283b%5D9%2F4%2F2%5Bdat... a A G wy w account should be written off. What effect will this action have on Zippy's 2021 profit? Explain your answer. Problem 8-54 Accounts receivable transactions and bad debt adjustments 10101, 2, 3 CHECK FIGURES: 2. Bad Debt Expense = $20,460; 5. Bad Debt Expense = $7,200 Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Accounts Receivable Dec. 31/19 Balance Allowance for Doubtful Accounts 16,400 Dec. 31/19...
Problem 85A Accounts receivable transactions and bad debt adjustments 01, 2, 3 CHECK AGURES: 2. Bad Debt Expense = $20,460,5. Bad Debt Expense = $7.200 Swiss Supplies showed the following selected adjusted balances at its December 31, 2019. yearend: Accounts Receivable Dec. 31/19 Balance Allowance for Doubtful Accounts 16,400 Dec. 31/19 Balance 490,000 During 2020, the following selected transactions occurred: 2. Sales totalled $2.800.000, of which 25% were cash sales (cost of sales $1.804,000). Sales returns were $108,000, half regarding...
Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Accounts Receivable Dec. 31/19 Balance 390,000 Allowance for Doubtful Accounts 20,400 Dec. 31/19 Balance During 2020, the following selected transactions occurred: a. Sales totalled $2,780,000, of which 25% were cash sales (cost of sales $1,795,000). b. Sales returns were $118,000, half regarding credit sales. The returned merchandise was scrapped. c. An account for $34,000 was recovered. d. Several accounts were written off: $36,000. e. Collections from...
Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable Orange Company’s December 31, 2019, balances related to accounts receivable follow. Accounts receivable $80,000 Dr. Allowance for doubtful accounts 4,000 Cr. During 2020, $9,000 of accounts receivable is considered uncollectible, and no more effort to collect these accounts will be made. Total sales for 2020 are $240,000, of which $40,000 are cash sales. A total of $180,000 was collected on account during 2020. a. Assuming that Orange uses...
Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable Master Company's December 31, 2019, balances related to accounts receivable follow. Accounts receivable $240,000 Dr. Allowance for doubtful accounts 12,000 Cr. During 2020, $27,000 of accounts receivable is considered uncollectible, and no more effort to collect these accounts will be made. Total sales for 2020 are $720,000, of which $120,000 are cash sales. A total of $540,000 was collected on account during 2020. a. Assuming that Master uses...
On December 31, 2020, Corotel Company's year-end, the unadjusted trial balance included the following items: Credit Account Accounts receivable Allowance for doubtful accounts Sales ($2,790,000 cash sales) Debit $2,090,000 32,000 $11,160,000 Required: 1. Prepare the adjusting entry needed in Corotel's books to recognize bad debts under each of the following independent assumptions. a. Bad debts are estimated to be 2% of credit sales. b. An analysis suggests that 5% of outstanding accounts receivable on December 31, 2020, will become uncollectible....
Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable At December 31, 2020, its annual year-end, the accounts of Sun Systems Inc. show the following. 1. Sales revenue for 2020, $288,000, of which one-sixth was on account. 2. Allowance for doubtful accounts, balance December 31, 2019, $1,440 credit. 3. Accounts receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2020), $28,880. 4. Uncollectible accounts to be written off, December 31, 2020, $1,680. 5....
Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable Master Company’s December 31, 2019, balances related to accounts receivable follow. Accounts receivable $720,000 Dr. Allowance for doubtful accounts 36,000 Cr. During 2020, $81,000 of accounts receivable is considered uncollectible, and no more effort to collect these accounts will be made. Total sales for 2020 are $2,160,000, of which $360,000 are cash sales. A total of $1,620,000 was collected on account during 2020. a. Assuming that Master uses...
The ledger of Larkspur, Inc. at the end of the current year shows Accounts Receivable $89,000; Credit Sales $830,000; and Sales Returns and Allowances $50,000 (a) If Larkspur uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Larkspur determines that Matisse $700 balance is uncollectible (b) If Allowance for Doubtful Account has a credit balance of $1,400 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts...
Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable At December 31, 2020, its annual year-end, the accounts of Sun Systems Inc. show the following. 1. Sales revenue for 2020, $720,000, of which one-sixth was on account. 2. Allowance for doubtful accounts, balance December 31, 2019, $3,600 credit. 3. Accounts receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2020), $72,200. 4. Uncollectible accounts to be written off, December 31, 2020, $4,200. 5....