Question

On April 30, Special Party Planners had a $37,000 balance in Accounts Receivable and a $2,422 credit balance in Allowance for Uncollectible Accounts. During May, Special made credit sales of $194,000. May collections on account were $171,000, and write-offs of uncollectible receivables totaled $2,830. Uncollectible-accounts expense is estimated as 3% of credit sales. No sales returns are expected. Ignore cost of goods sold. Read the requirements. Requirement 1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during May. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries.) (a) Begin by recording the journal entry for May sales. Journal Entry 1 Requirements - X Date Accounts Debit Credit Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during May. Explanations are not required. Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Net Accounts Receivable at May 31. How much does Special expect to collect? Show how Special Party Planners will report accounts receivable and net sales on its May 31 balance sheet and income statement for the month ended May 31.

Answer 1

$2,830 Answer: Journal Entries Date particulars TlDebit credit Accounts Receivable Ne or $194.000 To sales Revenue $194,000 (Being to record the sales ] 171.000 Cash Ale $ 171,000 To Accounts Receivables Being to record the collections] Allowance for doubtofel debts he or $2,830 6. TO Accounts Receivable . Being to write off uncollectible] Bad debla expense ale or $5,820 To Allowance for doubtful $5,820 e debto 64194.000*347. Being to record Bad debts expense] 2) T- Accounts: Allowance for coubtful debts account. particulars Amount particulars Amount Accounts Receivable $2,830 opening babence $2.422 closing balance $5.412 Bad debt expense $5,820 $8.242 $8,242 Accounts Receivable Account. particulars Amount particulars Amount openings balance $37000 Collections , $ 171,000 credit sales Is 194.000 Allowance for Doubtful &2 830 closing balance $57,170 $231.000 $231000 Net Accounts Receivable - $57,170- 5,412 = $ 51,758 special parly expects to collect: $51758. 3) Balance sheet. current Assets Accounts Receivable $57170 Less Allowance for doubtful debt ($5.412) Nev. $51,758 Income statement (partial) Bad debl expenses 175820