On December 31, 2021, when its Allowance for Doubtful Accounts had a zero balance, Ling Co. estimated that 2% of its net accounts receivable of $450,000 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Ling Co. determined that the Jeff Shoemaker account was uncollectible and wrote off $1,100. On June 12, 2022, Shoemaker paid the amount previously written off. Instructions Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. Journalize entries for the sale of accounts receivable
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
On December 31, 2021, when its Allowance for Doubtful Accounts had a zero balance, Ling Co. estimated that 2% of its net accounts receivable of $450,000 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Ling Co. determined that the Jeff Shoemaker account was uncollectible and wrote off $1,100. On June 12, 2022, Shoemaker paid the amount previously written off.
Instructions
Prepare the
Journalize entries for the sale of accounts receivable
Introduction:-
A journal entry is the act of recording or keeping track of any financial or non-financial action. An accounting journal records transactions and displays a company's debit and credit balances. Every journal entry must be either a debit or a credit. Otherwise, the journal entry is considered to be imbalanced if the total of the debits does not match the total of the credits. Depreciation and bond amortization are two recurring elements that can be reported in journal entries. Accounts payable has its own subledger with an indirect impact on the main ledger, therefore journal entries are frequently filed in a separate module.
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