Accounts Receivable $130,000 Debit Allowance for Doubtful Accounts $7,000 Credit owing During the year, credit sales were $810,000 and collections on account were $794,000. The following transactions, among others, occurred d Jan.11 Wrote off J. Wolf's account, Apr.29 Wrote off B. Avery's account, Nov.15 Received $1,000 from B. Avery to pay a debt that had been written off April 29. This amount is not included in the $794,000 collections. Dec.05 Wrote off D. Wright's account, Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts at of credit sales for the year. Required a. Prepare the journal entries to record the credit sales, the collections on account, the transactions, and the adjustment. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31 balance sheet. $3,000 $1,000 $2,250 196

Accounts Receivable $130,000 Debit Allowance for Doubtful Accounts $7,000 Credit owing During the year, credit sales were $810,000 and collections on account were $794,000. The following transactions, among others, occurred d Jan.11 Wrote off J. Wolf's account, Apr.29 Wrote off B. Avery's account, Nov.15 Received $1,000 from B. Avery to pay a debt that had been written off April 29. This amount is not included in the $794,000 collections. Dec.05 Wrote off D. Wright's account, Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts at of credit sales for the year. Required a. Prepare the journal entries to record the credit sales, the collections on account, the transactions, and the adjustment. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31 balance sheet. $3,000 $1,000 $2,250 196

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...

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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

Journal Entries for Credit Losses At January 1, the Griffin Company had the following accounts on its books:
Accounts Receivable
$130,000 Debit
Allowance for Doubtful Accounts $7,000 Credit
During the year, credit sales were $810,000 and collections on account were $794,000. The following transactions, among others, occurred during the year:
Jan.11 Wrote off J. Wolf's account,
Apr.29 Wrote off B. Avery's account,
Nov.15 Received $1,000 from B. Avery to pay a debt that had been written off April 29. This amount is not included in the $794,000 collections.
Dec.05 Wrote off D. Wright's account,
Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts at
of credit sales for the year.
Required
a. Prepare the journal entries to record the credit sales, the collections on account, the transactions, and the adjustment.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31 balance sheet.
a.
Date
Dec.31
Dec.31
Jan.11
Apr.29
Nov.15
Nov.15
Dec.05
Dec.31
b.
General Journal
Description
To record sales revenue for the year.
♦
◆
To record collections on account for the year.
◆
+
To write off J. Wolf's account.
To write off B. Avery's account.
To reinstate B. Avery's account.
To record collection from B. Avery.
To write-off D. Wright's account.
+
+
◆
$
$
◆
◆
→
◆
◆
→
To record allowance for doubtful accounts.
◆
◆
◆
◆
Debit
0
0
0
0 $
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Credit
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$3,000
$1,000
$2,250
196

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