Question

Required information

Exercise 7-1 Accounts receivable subsidiary ledger; schedule of accounts receivable LO C1

[The following information applies to the questions displayed below.]

Vail Company recorded the following transactions during November.

Date			General Journal	Debit		Credit
Nov.	5		Accounts Receivable—Ski Shop	4,314
			Sales			4,314
	10		Accounts Receivable—Welcome Enterprises	2,274
			Sales			2,274
	13		Accounts Receivable—Zia Natara	1,333
			Sales			1,333
	21		Sales Returns and Allowances	344
			Accounts Receivable—Zia Natara			344
	30		Accounts Receivable—Ski Shop	4,741
			Sales			4,741

Exercise 7-1 Part 1

1. Prepare a general ledger having T-accounts for Accounts Receivable, Sales, and Sales Returns and Allowances. Post these entries to both the general ledger and the accounts receivable ledger.

Required information Exercise 7-1 Accounts receivable subsidiary ledger; schedule of accounts receivable LO C1 [The following information applies to the questions displayed below.] Vail Company recorded the following transactions during November. Date General Journal Nov. 5 Accounts Receivable-Ski Shop Sales Debit Credit 4,314 4,314 10 Accounts Receivable-Welcome Enterprises Sales 2,274 2,274 1,333 13 Accounts Receivable-Zia Natara Sales 1,333 344 21 Sales Returns and Allowances Accounts Receivable-Zia Natara 344 30 Accounts Receivable-ski Shop 4,741 Sales 4,741 Exercise 7-1 Part 1 1. Prepare a general ledger having T-accounts for Accounts Receivable, Sales, and Sales Returns and Allowances. Post these entries to both the general ledger and the accounts receivable ledger. General Ledger Accounts Receivable Sales End.Bal End.Bal 0 Accounts Receivable Subsidiary Ledger Ski Shop Sales Returns and Allowances End.Bal 0 End.Bal 0 Welcome Enterprises Zia Natara End. Bal End.Bal 0

Problem 7-4A Accounts receivable transactions and bad debts adjustments LO C1, P2, P3

Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows.

Year 1

1. Sold $1,350,400 of merchandise (that had cost $983,600) on credit, terms n/30.
2. Wrote off $20,600 of uncollectible accounts receivable.
3. Received $672,500 cash in payment of accounts receivable.
4. In adjusting the accounts on December 31, the company estimated that 1.70% of accounts receivable would be uncollectible.

Year 2

5. Sold $1,507,000 of merchandise (that had cost $1,254,000) on credit, terms n/30.
6. Wrote off $30,000 of uncollectible accounts receivable.
7. Received $1,395,800 cash in payment of accounts receivable.
8. In adjusting the accounts on December 31, the company estimated that 1.70% of accounts receivable would be uncollectible.

  
Required:
Prepare journal entries to record Liang’s Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar.)

• Record cost of goods sold, $1,254,000.
• Wrote off $30,000 of uncollectible accounts receivable.
• Received $1,395,800 cash in payment of accounts receivable.
• In adjusting the accounts on December 31, the company estimated that 1.70% of accounts receivable would be uncollectible.

Answer 1

Problem 7 Part 1

Account Receivable Subsidiary Ledger

Date Paticulars Debit Slaes Date Paticulars Credit 5th Nov account re 4314 10th Nov (account re 2274 13th Nov Account R 1333 30th Nov account re 4741 End Balan12662 Sales Return Allowance Date Paticulars Debit Date Paticulars Credit 21st Nov Account R 344 End Balan 344 General Ledger Accounts Recievable Date Paticulars Debit Date Paticulars Credit 5th Nov Sales to s 4314|21st Nov Sales retu 344 10th Nov Sales to w 13th Nov Sales to 1333 30th Nov Sales to SI 4741 Balance C/fd 12318 End Balan_ 12662 End Balan 12662

Account Recievable Subsidiary Ledger Ski Shop Date Paticulars Debit Date Paticulars Credit 5th Nov Sales 1 4314 30th Nov Sales 4741||| End Balan 9055 Welcome Enterprises Date Paticulars Debit Date Paticulars Credit 10th Nov Sales 1 2274 End Balan 22741 Zia Natara Date Paticulars Debit Date Paticulars Credit 13th Nov Sales 1333||21st Nov Sales rety 344 Balance C/fd 1333 End Balance 989 1333 End Balan

Part 2 of Problem

No. Credit General Ledger Transactid General Journal 1a1 Account Receivable Sales Debit 1507000 1507000 2 a2 12540001 Cost of goods sold Merchandise inventory 1254000 1 30000 Allowance of doubtful accounts Accounts receivable 300001 1395800 Cash Accounts receivable 1395800 1380 Bad debt expesnes Allowance of doubtful accounts 380