Accounts receivable transactions and bad debts adjustments LO1 LO3 LO5
Sherman Co. began operations on January 1, 2009, and completed several transactions during 2009 and
2010 that involved sales on credit, accounts receivable collections, and bad debts. These transactions are
summarized as follows.
2009
a. Sold $685,320 of merchandise on credit, terms n_30.
b. Received $482,300 cash in payment of accounts receivable.
c. Wrote off $9,350 of uncollectible accounts receivable.
d. In adjusting the accounts on December 31, the company estimated that 1% of accounts receivable
will be uncollectible.
Check (d) Dr. Bad Debts Expense
$11,287
2010
e. Sold $870,200 of merchandise on credit, terms n_30.
f. Received $990,800 cash in payment of accounts receivable.
g. Wrote off $11,090 of uncollectible accounts receivable.
h. In adjusting the accounts on December 31, the company estimated that 1% of accounts receivable
will be uncollectible.
(h) Dr. Bad Debts Expense
$9,773
Required
Prepare journal entries to record Sherman’s 2009 and 2010 summarized transactions and its year-end adjusting entry to record bad debts expense. (Round amounts to the nearest dollar.)
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