Question

What are the match of accounting terms

The balance sheet of Regal Company on July 31, 2020 showed balances in Accounts Receivable of $625,000 and an Allowance for Doubtful Accounts of $30,500. During the month of August 2020, transactions affecting Accounts Receivable were as follows: a) Sales on account $637,000 b) Cash collections from credit customers 95,000 c) Accounts receivable from Good Company written-off as worthless 8,200 After a careful aging and analysis of all customer accounts on August 31, it was determined that the Allowance for Doubtful Accounts should be adjusted to a balance of $52,400. (note: the company is using the allowance method) 1) Prepare the general journal entries for each of the three above Transactions (a, b,&c). Use the transaction date of August 31, 2020. 2) Prepare the adjusting entry on August 31, 2020 to provide for uncollectible accounts assuming that Regal Company adjusts its accounts at the end of each month. 3) What is the amount of Net Accounts Receivable that should be reported on the Balance Sheet as of August 31, 2020? 4) Assume that on October 31st, two months after the accounts receivable from Good Company had been written-off as worthless, Good Company sent Regal a check for $4,100. Prepare the journal entry to record the recovery and receipt of payment from Good Company Continues on the next page

Answer 1

1. Journal entries for (a,b,c)

Date	Particulars	Debit	Credit
August 31,2020	Accounts receivable	$637,000
	Sales revenue		$637,000
	(Being sales on account recorded)
August 31,2020	Cash	95,000
	Accounts receivable		95,000
	(Being cash has been collected from customers on account of accounts receivable)
August 31,2020	Allowance for doubtful debts	8,200
	Accounts receivable		8,200
	(Being good company receivables considered as doubt full as per allowance method)

2)Adjusting entry

Opening balance of allowance for doubt full debts = $30,500

Provided on August31, 2020 = $8,200

Total allowance for doubt full debts as per books = $38,700

Which is to be adjusted to $ 52,400, So for the difference we have to create adjusting entry = $52,400-38,700 = 13,700

Date	Particulars	Debit	Credit
August 31,2020	Allowance for doubtful debts	$13,700
	Accounts receivable		13,700
	(Being bad debts adjusted)

3)Net Accounts receivable

Opening balance of accounts receivable = $625,000

Sales during the period                              = 637,000

Amount collected during the period         = (95,000)

Gross accounts receivable                            = 1167000

Allowance for doubt full debts                   = (52,400)

Net accounts receivable                               = $1,114,600

4) Recovery and Reciept of baddebts entry

Date	Particulars	Debit	Credit
Oct 30,2020	Accounts receivable	$4,100
	Allowance for doubtful debts		$4,100
	(Being recovery of bad debts has been adjusted)
Oct 30,2020	Bank	4,100
	Accounts receivable		4,100
	(Being receipt of bad debts has been recorded)

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