FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Required:
Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:
Determine the amount to be charged to the uncollectible expense account.
Prepare the Allowance for uncollectible account.
Prepare the
| Date | Particulars | Debit($) | Credit($) |
| 10.1.20 | Accounts Receivable | 11000 | |
| To sales | 11000 | ||
| 15.5.20 | Allowance for uncollectible accounts(2500+400) | 2900 | |
| To accounts receivable | 2900 | ||
| 4.8.20 | Cash(70% of 11000) | 7700 | |
| Allowance for uncollectible accounts(30% of $11000) | 3300 | ||
| To Accounts Receivable | 1100 | ||
| 26.10.20 | Accounts Receivable(30% of $400) | 120 | |
| To allowance for uncollectible accounts | 120 | ||
| 26.10.20 | Cash | 120 | |
| To accounts receivable | 120 | ||
| 31.12.20 | 91380 | ||
| To allowance for uncollectible accounts | 91380 | ||
allowance of uncollectible accounts
| Particulars | Amount($) |
| Estimated uncollectible accounts showed as per aging schedule(A) | 116500 |
| Closing balance of uncollectible accounts(10% of $312000) | 31200 |
| Accounts Receivable written off during the year(2900+3300) | (6200) |
| Bad debt recovered during the year | 120 |
| Total (B) | 25120 |
| Additional provision to be made(A-B) | 91380 |
Expert Solution
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Step 1
BS stands for Balance Sheet which is among the three other financial statement named CFS (Cash flow statement) and IS (Income Statement) and this statement shows the assets, owner's equity and liabilities of the period.
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