Question

Question At December 31, 2015. Ingeton Company reports the following results for they 31. 5.000 In addition und e r balance includes the following items Allowance for dow n A Dec 31, 2015 the company estimated bad debts as 3% of total sale Date Account Title Debit Credit Annot Liability common Stock Dividend Revenue Expense

Answer 1

Ingleton Company
Journal entries
Date	Account	Debit	Credit	Calculation
Req A
31-Dec	Bad debts expense	71,010
	Allowance for doubful accounts		71,010
	Workings
	Cash sales	1,025,000
	Credit sales	1,342,000
	Total Sales	2,367,000
	Bad debts expense @ 3%	71,010		=2,367,000*3%

Ingleton Company T Accounts Reg A Asset Debit Credit Accounts Receivable $575,000 Liability Debit Credit Common Stock Debit Credit Dividend Debit Credit Revenue Debit Credit Sales $1,025,000 $1,342,000 Expense Debit Credit Bad debts expense $ 71,010 $ 2,367,000 $ 71,010 $575,000 Allowance $ 7,500 $ 71,010 $ 78,510

Req B
31-Dec	Bad debts expense	9,750		=(575,000*3%)-7,500
	Allowance for doubful accounts		9,750
15-Feb	Allowance for doubful accounts	15,000
	Accounts Receivable		15,000
1-Apr	Accounts Receivable	15,000
	Allowance for doubful accounts		15,000
1-Apr	Cash	15,000
	Accounts Receivable		15,000

+ - + ReqB Asset Debit Credit Cash $ 15,000 Liability Debit Credit Common Stock Debit Credit Dividend Debit Credit Revenue Debit Credit Sales $ 1,025,000 $1,342,000 Expense Debit Credit Bad debts expense $ 9,750 $2,367,000 $ 9,750 $ 15,000 Accounts Receivable $575,000 $ 15,000 $ 15,000 $ 15,000 $560,000 Allowance $ 7,500 $ 9,750 $ 15,000 $ 15,000 $ 17,250