Journal Entries for Credit Losses At the beginning of the year, Whitney Company had the following accounts on its books:Accounts Receivable$130,000 DebitAllowance for Doubtful Accounts$8,000 CreditDuring the year, credit sales were:and collections on account were:$1,173,000$1,175,000The following transactions, among others, occurred during the year:Feb.17 Wrote off R. Lowell's account,May.28 Wrote off G. Boyd's account,Oct. 13Received $600 from G. Boyd, who is in bankruptcy proceedings,in final settlement of the account written off on May 28.This amount is not included in the $1,175,000 collections.Wrote off K. Marshall's account.Dec. 15Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts atof credit sales for the year.$4,000$2,400$1,6000.9%a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment.b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet. DateDec.31Dec.31Feb. 17May.28Oct. 13Oct.13Dec.15Dec.31b.General JournalDescriptionTo record sales revenue for the year.To record collections on account for the year.To write off R. Lowell's account.To write off G. Boyd's account.To record collection from G. Boyd.To reinstate G. Boyd's account for partial recovery.To write-off K. Marshall's account.To record allowance for doubtful accounts.($$tA4)→◆◄►4)$LADebit$Credit

Journal entries for credit losses involve recording anticipated losses due to accounts receivable…

a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.

a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...

See similar textbooks

Similar questions

Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Required: 1. Determine the desired post adjustment balance in allowance for doubtful accounts. 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense.
Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: a. Journalize the write-offs under the direct write-off method. b. Journalize the write-offs under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded 5,250,000 of credit sales during the year. Based on past history and industry averages, % of credit sales are expected to be uncollectible. c. How much higher (lower) would Casebolt Companys net income have been under the direct write-off method than under the allowance method?
At the beginning of the year, the Dallas Company had the following accounts on its books: Accounts Receivable $264,000 Debit Allowance for Doubtful Accounts $16,500 Credit During the year, credit sales were $2,346,000 and collections on account were $2,350,000. The following transactions, among others, occurred during the year: Feb.17 Wrote off R. St. John’s account, $7,500 May.28 Wrote off G. Herberger’s account, $4,800 Oct.13 Received $1,200 from G. Herberger, who is in bankruptcy proceedings, in final settlement of the account written off on May 28. This amount is not included in the $2,350,000 collections. Dec.15 Wrote off R. Clancy’s account, $5,000 Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts at 0.8% of credit sales for the year. Requireda. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment. b. Show how Accounts Receivable and the…
Journal Entries for Credit Losses At January 1, the Griffin Company had the following accounts on its books: Accounts Receivable $129,000 Debit Allowance for Doubtful Accounts $7,100 Credit During the year, credit sales were: $841,000 and collections on account were: $824,000 The following transactions, among others, occurred during the year: Jan.11 Wrote off J. Wolf's account, $3,100 Apr.29 Wrote off B. Avery's account, $1,300 Nov.15 Received $1,300 from B. Avery, to pay a debt that had been written off on April 29, in final settlement of the account written off on April 29. This amount is not included in the $824,000 collections. Dec.05 Wrote off D. Wright's account, $2,450 Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts at 1.1% of credit sales for the year. Required a. Prepare the journal entries to record the credit sales, the collections on account, the transactions and the adjustment. b. Show how…
Journal Entries for Credit Losses At January 1, the Griffin Company had the following accounts on its books: Accounts Receivable $130,000 Debit Allowance for Doubtful Accounts $7,000 Credit During the year, credit sales were $810,000 and collections on account were $794,000. The following transactions, among others, occurred during the year: Jan.11 Wrote off J. Wolf's account, Apr.29 Wrote off B. Avery's account, Nov.15 Received $1,000 from B. Avery to pay a debt that had been written off April 29. This amount is not included in the $794,000 collections. Dec.05 Wrote off D. Wright's account, Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts at of credit sales for the year. Required a. Prepare the journal entries to record the credit sales, the collections on account, the transactions, and the adjustment. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31 balance sheet. a. Date Dec.31 Dec.31 Jan.11 Apr.29 Nov.15…
Credit Losses Based on Credit Sales Smith & Sons uses the allowance method of handling its credit losses. It estimates credit losses at two percent of credit sales, which were $1,900,000 during the year. On December 31, the Accounts Receivable balance was $300,000, and the Allowance for Doubtful Accounts had a credit balance of $21,400 before adjustment. Prepare the adjusting entry to record the credit losses for the year. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. a. General Journal Date Description Debit Credit Dec.31 Answer Answer Answer Answer Answer Answer To record allowance for credit losses. b. (Do not use negative signs with your answers.) Current Assets: Answer Answer Answer Answer Answer PreviousSave AnswersNext
Credit Losses Based on Accounts Receivable At December 31, Schuler Company had a balance of $369,000 in its Accounts Receivable account and a credit balance of $4,200 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $374,000 in debit balances and $5,000 in credit balances. The company aged its accounts as follows: Current 0-60 days past due 61-180 days past due Over 180 days past due In the past, the company has experienced credit losses as follows: one percent of current balances, five percent of balances 0-60 days past due, 18 percent of balances 61-180 days past due, and 40 percent of balances over six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable. Required a. Prepare the adjusting entry to record the allowance for doubtful accounts for the year. b. Show how Accounts Receivable (including the credit balances) and the Allowance for Doubtful Accounts would appear on the…
ble The balance sheet of Omni, Inc., at the end of last year included the following Offs and coverles items: Notes receivable from customers Accrued Interest on notes receivable Accounts recelvable...... .$ 5 40,000 10,800 Less: Allowance for doubtful accounts 2,268,000 54,000 STRUCTIONS You are to record the following events of the current year in general journal en- tries: a Accounts receivable of $51,840 are vritten off as uncollectible. b Acustomer's note for $14,850, on which interest of $810 has been accrued in the accounts, is deemed uncollectible, and both balances are written off against the Allowance for Doubtful Accounts. c An account receivable for $7,020 previously written off is collected. d Aging of accounts receivable at the end of the current year indicates a need for an $81,000 allowance to cover possible failure to collect accounts currently out- standing. (Consider the effect of entries for a, b, and e on the amount of the Allowance for Doubtful Accounts.)
Credit Losses Based on Accounts Receivable At December 31, the Hope Company had a balance of $1,241,200 in its Accounts Receivable account and a credit balance of $11,200 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $1,264,800 in debit balances and $23,600 in credit balances. The company aged its accounts as follows: Current $1,060,000 0-60 days past due 124,000 61-180 days past due 46,000 Over 180 days past due 34,800 $1,264,800 In the past, the company has experienced credit losses as follows: 2% of current balances, 6% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable.Requireda. Prepare the adjusting entry to record the allowance for doubtful accounts for the year.b. Show how Accounts Receivable (including the credit balances) and the Allowance for…
Question No 2: The credit manager of Montour Fuel has gathered the following information about the company's accounts receivable and credit losses during the current year: Net credit sales for the year.. S8,000,000 Accounts receivable at year-end. 1,750,000 Uncollectible accounts receivable: Actually written off during the year. $96,000 Estimated portion of year-end receivables expected to prove uncollectible (per aging schedule).. 84,000 180,000 Prepare one journal entry summarizing the recognition of uncollectible accounts expense for the entire year under each of the following independent assumptions: a. Uncollectible accounts expense is estimated at an amount equal to 3.5 percent of net credit sales. b. Uncollectible accounts expense is recognized by adjusting the balance in the Allowance for Doubtful Accounts to the amount indicated in the year-end aging schedule. The balance in the allowance account at the beginning of the current year was $35,000. (Consider the effect of the…
Credit Losses Based on Accounts Receivable At December 31, the Hope Company had a balance of $1,247,200 in its Accounts Receivable account and a credit balance of $11,200 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $1,270,400 in debit balances and $23,200 in credit balances. The company aged its accounts as follows: Current $1,056,000 0-60 days past due 120,000 61-180 days past due 52,800 Over 180 days past due 41,600 $1,270,400 In the past, the company has experienced credit losses as follows: 2% of current balances, 6% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable.Requireda. Prepare the adjusting entry to record the allowance for doubtful accounts for the year.b. Show how Accounts Receivable (including the credit balances) and the Allowance for…
6 Mario Company's Accounts Receivable balance atDecember 31 was $300,000 and there was a credit balance of $1,400 in the Alowance for Doubtful Accounts, The year's sales were $1,800,000. Mario estimates credit losses for the year at 1.5% of sales. After the appropriate adjusting entry is made for credit losses, what is the net amount of accounts receivable included in the current assets at year- end? A) $300,000 B) $271,600 C) $325,400 D) $277,400