Excel Inc. has provided the following information relating to its sales for the past year, which ended December 31, 20x1. Account Debit Estimated % of accounts receivable that will be uncollectable 4% Opening Balances: Jan. 1, 20x1 balance in the allowance for doubtful account (this is before any adjusting entries) $2,000 cr Jan. 1, 20x1 balance in the accounts receivable account $37,000 dr During 20x1: Credit sales (20x1) Write offs of uncollectible accounts receivable (20x1) Collections of previously written off amounts (20x1) Cash received in payment of accounts receivable (20x1) $450,000 $6,200 $900 $426,000 Required - 1) Calculate the balance in the Accounts Receivable account at December 31, 20x1. 2) Calculate the balance in the Allowance for Doubtful Accounts at December 31, 20x1. 3) Prepare any journal entries required at December 31, 20x1 to record bad debt expense for the year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Excel Inc. has provided the following information relating to its sales for the past year, which ended
December 31, 20x1.
Асcount
Debit
Credit
Estimated % of accounts receivable that will be uncollectable
4%
Opening Balances:
Jan. 1, 20x1 balance in the allowance for doubtful account
$2,000 cr
|(this is before any adjusting entries)
Jan. 1, 20x1 balance in the accounts receivable account
$37,000 dr
During 20x1:
Credit sales (20x1)
$450,000
$6,200
Write offs of uncollectible accounts receivable (20x1)
$900
Collections of previously written off amounts (20x1)
Cash received in payment of accounts receivable (20x1)
$426,000
Required –
1) Calculate the balance in the Accounts Receivable account at December 31, 20x1.
2) Calculate the balance in the Allowance for Doubtful Accounts at December 31, 20x1.
3) Prepare any journal entries required at December 31, 20x1 to record bad debt expense for the year.
Transcribed Image Text:Excel Inc. has provided the following information relating to its sales for the past year, which ended December 31, 20x1. Асcount Debit Credit Estimated % of accounts receivable that will be uncollectable 4% Opening Balances: Jan. 1, 20x1 balance in the allowance for doubtful account $2,000 cr |(this is before any adjusting entries) Jan. 1, 20x1 balance in the accounts receivable account $37,000 dr During 20x1: Credit sales (20x1) $450,000 $6,200 Write offs of uncollectible accounts receivable (20x1) $900 Collections of previously written off amounts (20x1) Cash received in payment of accounts receivable (20x1) $426,000 Required – 1) Calculate the balance in the Accounts Receivable account at December 31, 20x1. 2) Calculate the balance in the Allowance for Doubtful Accounts at December 31, 20x1. 3) Prepare any journal entries required at December 31, 20x1 to record bad debt expense for the year.
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For part 2, do "written off" and "previously written off accounts collection" fall under debit or credit?

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