receivables transactions.
E8.4 (LO 1, 2), AP Assume the following information for Larry Corp.
Accounts receivable (beginning balance) |
$142,000 |
Allowance for doubtful accounts (beginning balance) |
11,360 |
Net credit sales |
945,000 |
Collections |
910,000 |
Write-offs of accounts receivable |
5,200 |
Collections of accounts previously written off |
1,900 |
Uncollectible accounts are expected to be 8% of the ending balance in accounts receivable.
Instructions
a.
Prepare the entries to record sales and collections during the period.
b.
Prepare the entry to record the write-off of uncollectible accounts during the period.
c.
Prepare the entries to record the recovery of the uncollectible account during the period.
d.
Determine the ending balance in Accounts Receivable and the unadjusted balance in Allowance for Doubtful Accounts.
e.
Prepare the entry to record bad debt expense for the period.
f.
Determine the ending (adjusted) balance in Allowance for Doubtful Accounts.
Journal entry
No | Account and explanation | Debit | Credit |
a | Account receivable | 945000 | |
Sales revenue | 945000 | ||
(To record sales) | |||
Cash | 910000 | ||
Account receivable | 910000 | ||
(To record collection) | |||
b | Allowance for doubtful accounts | 5200 | |
Account receivable | 5200 | ||
(To record write off) | |||
c | Account receivable | 1900 | |
Allowance for doubtful account | 1900 | ||
(To record reinstate) | |||
Cash | 1900 | ||
Account receivable | 1900 | ||
(To record collection) | |||
d) Ending balance of account receivable = 142000+945000-910000-5200 = 171800
Unadjusted balance for allowance for doubtful accounts = 11360+1900-5200 = 8060
e) Bad debt expense = (171800*8%-8060) = 5684
f) Ending balance in allowance for doubtful accounts = 13744
receivables transactions. E8.4 (LO 1, 2), AP Assume the following information for Larry Corp. Accounts re...
E8.4 (LO 1, 2), AP Assume the following information for Larry Corp. $142,000 11,360 945,000 910,000 5,200 Accounts receivable (beginning balance) Allowance for doubtful accounts (beginning balance) Net credit sales Collections Write-offs of accounts receivable Collections of accounts previously written off 1,900 Uncollectible accounts are expected to be 8% of the ending balance in accounts receivable. on Instructions a. Prepare the entries to record sales and collections during the period. b. Prepare the entry to record the write-off of uncollectible...
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Accounts receivable (beginning balance)
$135,000
Allowance for doubtful accounts (beginning balance)
11,390
Net credit sales
940,000
Collections
902,000
Write-offs of accounts receivable
5,900
Collections of accounts previously written off
2,200
Uncollectible accounts are expected to be 6% of the ending balance
in accounts receivable.
Prepare the entries to record sales and collections during the
period. (Credit account titles are automatically
indented when the amount is entered. Do not indent
manually.)
Account Titles and...
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Accounts receivable (beginning balance)
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Allowance for doubtful accounts (beginning balance)
11,500
Net credit sales
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Collections
907,000
Write-offs of accounts receivable
5,700
Collections of accounts previously written off
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Prepare the entries to record sales and collections during the
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Account Titles and...
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