Question

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At December 31,2019, Cullumber Company reported the following information on its balance sheet. $972,000 Accounts receivable Less: Allowance for doubtful accounts 75,000 During 2020, the company had the following transactions related to receivables. $3,685,510 1. Sales on account 47,000 2. Sales returns and allowances 3. Collections of accounts receivable 2,817,000 4. Write-offs of accounts receivable deemed uncollectible 87,000 5. Recovery of bad debts previously written off as uncollectible31000 Enter the January 1,2020, 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. Bal. 972000 (2) 47000 委 (1) 3685510 3) 2817000 31000 ) 15) 87000 15) 31000 Bal. Customize and control Googl 87000 Bal. 75000 15) 31000 Bal. eTextbook and Media List of Accounts Your answer is incorrect. Prepare the journal entry to record bad debt expense for 2020, assuming that an aging of accounts receivable indicates that expected bad debts are $85,510.(Credt account tities are automatlcally Indented when amount is entered. Do not Indent manually.) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts x Your answer is incorrect Compute the accounts receivable turnover for 2020, assuming the expected bad debt information provided in (c).(Round answer to 2 decimal places, eg. 25.25.) Accounts receivable turnover rati times

Answer 1

Journal entries:
S.no.	Accounts title nd explanations				Debit $	Credit $
1	Accounts receivavble				3685510
	sales revenue					3685510
2	Sales return and allowance				47000
	Accounts receivable					47000
3	Cash account				2817000
	Accounts receivable					2817000
4	Allowance for doubtful accounts				87000
	Accounts receivable					87000
5	Accounts receivable				31000
	Allowance for doubtful accounts					31000
	Cash account				31000
	Accounts receivable					31000
Accounts receivable
Balance		972000	Allowance for doubtful accounts		87000
Allowance for Doubtful accounts		31000	Sales return		47000
Sales revenue		3685510	Cash		2817000
			Cash		31000
Ending balance		1706510
Allowance for Doubtful accounts
Accounts receivable		87000	Balance		75000
			Accounts receivable		31000
			Ending balance		19000
Journal entry for Bad debts expenses:
Bad debts expenses (85510-19000)				66510
Allowance for Doubtful accounts					66510
Average gross Accounts receivable (972000+1706510)/2 =						1339255
Sales revenue		(3685510-47000)				3638510
Accounts Receivable turnover = Sales revenue net / Average accounts receivable
			3638510/1339255 = 2.72 times
			2.716816
Average collection period = 365 / Accounts receivable turnover
			365/ 2.72 = 160.65 days