Question

Spring Break Travelended 2019 wth Accounts Receivable et $88,000 and an Allowance for Dautiful Accounts at $17,200. During 2020, Spring Break Travel compted the transactions 1. Service revenue on account $820,000 (same cost of goods sold 2. Colections on account, $855.000 3. Write-offs of uncollectibles $6.000 4. Bad debt expense 2 percent of service revenue Joumaize Spring Break Travels 2020 transactions, and show updated balance sheet Begin by recording service revenue Service revenue on account, $20.000 (assume no cost of goods) (Record debt first, then credentions from ouma entre) Journal Entry Accounts Credit Debit 1

Answer 1

Credit # Accounts 1 Accounts Receivable Service Revenue Debit $820,000 $820,000 $855,000 2 Cash Accounts Receivable $855,000 $6,000 3 Allowance for Doubtful Accounts Accounts Receivable $6,000 $16,400 4 Bad Debt Expense Allowance for Doubtful Accounts $16,400

Balance Sheet Accoounts Receivable Less: Allowance for Doubtful Accounts Accoounts Receivable (net) $47,000 ($27,600) $19,400

Working note:

Accounts Receivable at end = $88,000+$820,000-$855,000-$6,000

Accounts Receivable at end = $47,000

Allowance for doubtful accounts at end = $17,200-$6,000+$16,400

Allowance for doubtful accounts at end = $27,600

I hope this clear your doubt.

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