Question

At December 31, 2018, Blue Spruce Corp. reported the following information on its balance sheet.

$960,000 82,000 Accounts receivable Less: Allowance for doubtful accounts

During 2019, the company had the following transactions related to receivables.

Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.
Enter the January 1, 2019, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances. (Post entries in the order of journal entries presented in the previous part.)

Prepare the journal entry to record bad debt expense for 2019, assuming that an aging of accounts receivable indicates that expected bad debts are $ 438,290. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Compute the accounts receivable turnover for 2019, assuming the expected bad debt information provided in (c). (Round answer to 2 decimal places, e.g. 25.25.)


Step by step would be nice :)

Answer 1

Answer
Journal Entry
No.	Account Name	Debit	Credit
1	Accounts receivable	$39,67,290
	Sales revenue		$39,67,290
2	Sales returns and allowances	$46,000
	Accounts receivable		$46,000
3	Cash	$27,55,000
	Accounts receivable		$27,55,000
4	Allowance for doubtful accounts	$92,000
	Accounts receivable		$92,000
5	Accounts receivable	$31,000
	Allowance for doubtful accounts		$31,000
	Cash	$31,000
	Accounts receivable		$31,000
Accounts receivable
Particulars	$	Particulars	$
Beginning balance	$9,60,000	Cash	$27,55,000
Sales revenue	$39,67,290	Allowance for doubtful accounts	$92,000
Allowance for doubtful accounts	$31,000	Cash	$31,000
		Sales Return	$46,000
		Ending balance	$20,34,290
Total	$ 49,58,290		$ 49,58,290
Allowance for doubtful accounts
Particulars	$	Particulars	$
Accounts receivable	$88,200	Beginning balance	$82,000
Accounts receivable	$31,000	Accounts receivable	$31,000
		Ending balance	$6,200
Total	$1,19,200		$1,19,200
Journal
Account Name	Debit	Credit
Bad debt expense (438290+6200)	$4,44,490
Allowance for doubtful accounts		$4,44,490
Accounts receivable = $20,34,290
​Accounts receivable in the beginning = $960000-82000 = $878000
Accounts receivable turnover = Net Sales revenue / Average Accounts receivable
($3967290-46000) / [($878000+2034290)/2] = 2.69 or 2.69 Time