Question

a.) Journalize the transactions.

b.) Post to Allowance for Doubtful Accounts, Income Summary, and Bad Debts Expense accounts as needed.

c.)Prepare a current assets section of the balance sheet. Ending balances needed as follows: Cash, $13,500; Accounts Receivable, $165,000; Office Supplies, $2,100; Merchandise Inventory, $105,000; Prepaid Rent, $1,350.

L. POLL balance in Allowance for Doubtful Accounts lui ITC MOUI 3. Sigmund Company completed the following transactions in 2012: • Jan. 9 Sold merchandise on account to Roger's Supply, $1,200. • Jan. 15 Wrote off the account of Pete Ramirez as uncollectible because of his death, $500. • Mar. 17 Received $450 from Roland Co., whose account had been written off in 2011. The account was reinstated and the collection recorded. • Apr. 9 Received 18% of the $4,100 owed by Lane Danks. The remainder was written off as uncollectible. • June 15 The account for Mae's Garage was reinstated for $1,500. The account was written off three years ago and collected in full today. • Oct. 18 Prepared a compound entry to write the following accounts off as uncollectible: Jim's Diner, $220; Kross Auto, $460; Reece's Hardware, $800. • Nov. 12 Sold merchandise on account to J.B. Rug, $2,200. . Dec. 31 Based on an aging of Accounts Receivable, it was estimated that $7,000 will be uncollectible out of a total of $165,000 in Accounts Receivable. . Dec. 31 Closed Bad Debts Expense to Income Summary. From these transactions as well as the following additional data, complete a-c: Balance Acct. No. Allowance for Doubtful Accounts 114 $4,200 Income Summary 312 Bad Debt Expense 612 Figure 2

Answer 1

Sigmund Company Journal entries Date Account 9-Jan Accounts Receivable Sales Credit Calculation Debit $ 1,200 $ 1,200 $ 500 15-Jan Allowance for doubtful accounts Accounts Receivable $ 500 $ 450 $ 450 17-Mar Accounts Receivable Allowance for doubtful accounts Cash Accounts Receivable $ 450 $ 450 -4,100*18% 9-Apr Cash Allowance for doubtful accounts Accounts Receivable $ $ 738 3,362 $ 4,100 $ 1,500 $ 1,500 15-Jun Accounts Receivable Allowance for doubtful accounts Cash Accounts Receivable $ 1,500 $ 1,500 $ 1,480 =220+460+800 18-Oct Allowance for doubtful accounts Accounts Receivable $ 1,480 $ 2,200 12-Nov Accounts Receivable Sales $ 2,200 $ 6,192 31-Dec Bad debts expense Allowance for doubtful accounts =7,000-808 6,192 As per T Accounts $ $ 6,192 31-Dec Income Summary Bad debts expense $ 6,192

Credit Credit Sigmund Company T Accounts Date Debit Date Credit Allowance for doubtful accounts 15-Jan $ 500 Op bal $ 4,200 9-Apr $ 3,362 17-Mar $ 450 18-Oct $ 1,480 15-Jun $ 1,500 Date Debit Date Income Summary 31-Dec $ 6,192 Date Debit Date Bad debts expense 31-Dec $ 6,192 $ 6,192 Bal. $ 6,192 Unadj Bal $ 808 Bal. 31-Dec $ 6,192 Bal. $ 7,000

13,500 Sigmund Company Balance Sheet As of December 31 Assets Current Assets Cash Accounts Receivable Allowance for doubtful accounts Office Supplies Merchandise Inventory Prepaid Rent Total Current Assets 165,000 (7,000) 158,000 2,100 105,000 1,350 279,950