Question

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3. (8 points) The balance sheet of Starsky Company at December 31, 2018, includes the following. Accounts receivable 500,000 Less: Allowance for doubtful accounts (40,000) $460,000 Transactions in 2019 include the following. 1. Sales on credit for the year were $1,000,000. (all service revenue) 2. Accounts receivable of $850,000 were collected. 3. Customer accounts of $34,000 were written off during the year. 4. At year-end, bad debts were estimated to be 5% of the ending A/R balance (based on the % of A/R method). Make sure to update the A/R and Allowance balance for the transactions above before calculating bad debt expense. Prepare all journal entries necessary to reflect the transactions above. Credit Accounts Debit 1. 2. 3.

3. (8 points) The balance sheet of Starsky Company at December 31, 2018, includes the following.Accounts receivable500,000Less: Allowance for doubtful accounts(40,000)$460,000Transactions in 2019 include the following.1.Sales on credit for the year were $1,000,000. (all service revenue)2.Accounts receivable of $850,000 were collected.3.Customer accounts of $34,000 were written off during the year.4.At year-end, bad debts were estimated to be 5% of the ending A/R balance (based on the % of A/R method). Make sure to update the A/R and Allowance balance for the transactions above before calculating bad debt expense.Prepare all journal entries necessary to reflect the transactions above.AccountsDebitCredit1.2.3. .......................................................................................................................................................................................................Page 34.

*PLEASE TYPE THE ANSWER SO IT'S CAPABLE FOR ME TO COPY AND PASTE THANKS\

*PLEASE TYPE THE ANSWER SO IT'S CAPABLE FOR ME TO COPY AND PASTE THANKS\

*PLEASE TYPE THE ANSWER SO IT'S CAPABLE FOR ME TO COPY AND PASTE THANKS\

Answer 1

Journal entries:

1	Accounts receivable	$1,000,000
	Sales revenue		$1,000,000
	[To record Sales on account]
2	Cash	$850,000
	Accounts receivable		$850,000
	[To record cash collections]
3	Allowance for doubtful accounts	$34,000
	Accounts receivable		$34,000
	[To record write off of uncollectibles]
4	Bad debt expense	$24,800
	Allowance for doubtful accounts		$24,800
	[To record bad debt expense]

Calculations:

Accounts receivable
Beg.	$500,000	Tran.2	$850,000
Tran.1	$1,000,000	Tran.3	$34,000
End.	$616,000
Allowance for doubtful accounts
Tran.3	$34,000	Beg.	$40,000
		Tran.4 (Balance figure)	$24,800
		End. (616,900 x 5%)	$30,800