At December 31, 2024, Crane Imports reported this information on its balance sheet. Accounts receivable $587,000 Less: Allowance for doubtful accounts 36,000 During 2025, the company had the following transactions related to receivables. 1. Sales on account $2,650,000 2. Sales returns and allowances 55,000 3. Collections of accounts receivable 2,350,000 4. Write-offs of accounts receivable deemed uncollectible 40,500 5. Recovery of bad debts previously written off as uncollectible 15,300 (a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Omit cost of goods sold entries.) (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
At December 31, 2024, Crane Imports reported this information on its balance sheet. Accounts receivable $587,000 Less: Allowance for doubtful accounts 36,000 During 2025, the company had the following transactions related to receivables. 1. Sales on account $2,650,000 2. Sales returns and allowances 55,000 3. Collections of accounts receivable 2,350,000 4. Write-offs of accounts receivable deemed uncollectible 40,500 5. Recovery of bad debts previously written off as uncollectible 15,300 (a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Omit cost of goods sold entries.) (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
vi.3
Transcribed Image Text:At December 31, 2024, Crane Imports reported this information on its balance sheet.
Accounts receivable
$587,000
Less: Allowance for doubtful accounts
36,000
During 2025, the company had the following transactions related to receivables.
1.
Sales on account
$2,650,000
2.
Sales returns and allowances
55,000
3.
Collections of accounts receivable
2,350,000
4.
Write-offs of accounts receivable deemed uncollectible
40,500
5.
Recovery of bad debts previously written off as uncollectible
15,300
(a)
Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections
of accounts receivable. (Omit cost of goods sold entries.) (List all debit entries before credit entries. Credit account titles are
automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter O for the amounts.)
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