Question

Flag this question for future merece Journal Entries for Credit Losses At January 1, the Blake Company had the following accounts on its books: Accounts Receivable $130,000 Debit Allowance for Doubtful Accounts $7,000 Credit During the year, credit sales were $850,000 and collections on account were $794,000. The following transactions, among others occurred during the year Jan. 11 Wrote off. Woll's account, $32000 Apr 29 Wrote off B. Avery's account, $2.000 Nov.15 Received 51.000 from B. Avery to pay a debt that had been written off April 29. This amount is not included in the $75.000 collections Dec 05 Wrote off. Wright's account. $2.50 Dec 31 in an adjusting entry, recorded the allowance for doubt accounts at of credit sales for the year Required a. Prepare the journal entries to record the credit sales, the collections on account the transactions and the adjustment b. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31 balance sheet

Answer 1

Question b. Accounts receivable and allowance for doubtful accounts appear on December 31 balancesheet.

We need to calculate the net balance of account receivables:-

Particulars	Amount ($)
Open account receivables	130000
Add :- credit sales during the year	850000
Less :- cash collections	(794000)
Less :- write off of wolf account	(3000)
Less :- write off of Avery account	(2000)
Net account receivables	181000

b.

Account receivables	$181000
Less :- allowance for doubtful debts	($9250)
	$171750

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