Required:Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:Determine the amount to be charged to the uncollectible expense account.Prepare the Allowance for uncollectible account.Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31Journal EntriesDateParticularsDebit($)Credit($)10.1.20Accounts Receivable11000 To sales 11000 15.5.20Allowance for uncollectible accounts(2500+400)2900 To accounts receivable 2900 4.8.20Cash(70% of 11000)7700 Allowance for uncollectible accounts(30% of $11000)3300 To Accounts Receivable 1100 26.10.20Accounts Receivable(30% of $400)120 To allowance for uncollectible accounts 120 26.10.20Cash 120 To accounts receivable 120 31.12.20Bad debt (W.N.1)91380 To allowance for uncollectible accounts 91380 allowance of uncollectible accountsParticularsAmount($)Estimated uncollectible accounts showed as per aging schedule(A)116500Closing balance of uncollectible accounts(10% of $312000)31200Accounts Receivable written off during the year(2900+3300)(6200)Bad debt recovered during the year120Total (B)25120Additional provision to be made(A-B)91380

Answered: llectible. Using the percentage of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Related questions

Question

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 balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31

Journal Entries

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	Bad debt (W.N.1)	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

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.