b) Tommy MacDonald Company experienced the following transactions during an accounting period: a) Began the accounting period with a normal balance in its allowance account of $780,000. b) Wrote-off a receivable from Tom Matney Company in the amount $2,000. c) Wrote-off a receivable from Anthony Palmer Company in the amount of $212,000. d) Wrote-off a receivable from Renaud Pelletier Company in the amount of $76,000. e) Experienced a write-off recovery from Thomasin Pitts Company in the amount of $7,500. I f) Calculated the required balance in the allowance account to be $623,000 at the end of the period. Complete the following "T" account for the account activity described above in the allowance for doubtful accounts account. ALLOW FOR DOUBTFUL ACCTS DR CR

b) Tommy MacDonald Company experienced the following transactions during an accounting period: a) Began the accounting period with a normal balance in its allowance account of $780,000. b) Wrote-off a receivable from Tom Matney Company in the amount $2,000. c) Wrote-off a receivable from Anthony Palmer Company in the amount of $212,000. d) Wrote-off a receivable from Renaud Pelletier Company in the amount of $76,000. e) Experienced a write-off recovery from Thomasin Pitts Company in the amount of $7,500. I f) Calculated the required balance in the allowance account to be $623,000 at the end of the period. Complete the following "T" account for the account activity described above in the allowance for doubtful accounts account. ALLOW FOR DOUBTFUL ACCTS DR CR

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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Use the following information about a company's receivable transactions to determine relevant balances. * Account balances at 1/1/x2 Accounts receivable $100,000 Allowance for doubtful accounts 7,000 Allowance for sales returns 2,000 During the year, 20x2, the company had the following transactions related to receivables: • Credit sales revenue of $350,000 recorded. • Cash collections from accounts of $370,000. • Customer account write-offs in the amount of $10,000 • Customer returns of credit sales in the amount of $3,500. • Bad debt expense of $5,000 recorded at the end of the period. • The company estimates sales returns at 2% of credit sales revenue for the period. Determine the net realizeable value of receivables at the end of the year as disclosed on the balance sheet.
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Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. Year 1 Sold $1,346,100 of merchandise on credit (that had cost $983,000), terms n/30. Wrote off $21,100 of uncollectible accounts receivable. Received $673,300 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.80% of accounts receivable would be uncollectible. Year 2 Sold $1,577,400 of merchandise (that had cost $1,329,500) on credit, terms n/30. Wrote off $25,000 of uncollectible accounts receivable. Received $1,122,600 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.80% of accounts receivable would be uncollectible. Required: Prepare journal entries to record Liang's Year 1 and Year 2 summarized transactions and its year-end…