At January 1, 2024, Hilly Mountain Flagpoles had Accounts Receivable of $27,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilly Mountain Flagpoles recorded the following transactions for January (Click the icon to view the transactions.) Read the requirements. Requirement 1. Journalize Hilly's transactions that occurred during January. The company uses the allowance method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) (a.) Sales of $172,000 ($156,000 on account; $16,000 for cash). Ignore Cost of Goods Sold. (Prepare a single compound journal entry.) Debit Credit Date Accounts and Explanation 2024 Jan. Requirements 4 1. Journalize Hilly's transactions that occurred during January. The company uses the allowance method. 2 3. Post Hilly's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. - X Journalize Hilly's adjustment to record bad debts expense assuming Hilly estimates bad debts as 9% of accounts receivable on January 31, 2024. Post the adjustment to the appropriate T-accounts. 4. Show how Hilly Mountain Flagpoles will report net accounts receivable on its January 31, 2024, balance sheet. Print Done More info a Sales of $172,000 ($156,000 on account $16,000 for cash). Ignore Cost of Goods Sold. b. Collections on account, $124,000. c. Write-offs of uncollectible receivables, $2,200. Print Done - X
At January 1, 2024, Hilly Mountain Flagpoles had Accounts Receivable of $27,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilly Mountain Flagpoles recorded the following transactions for January (Click the icon to view the transactions.) Read the requirements. Requirement 1. Journalize Hilly's transactions that occurred during January. The company uses the allowance method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) (a.) Sales of $172,000 ($156,000 on account; $16,000 for cash). Ignore Cost of Goods Sold. (Prepare a single compound journal entry.) Debit Credit Date Accounts and Explanation 2024 Jan. Requirements 4 1. Journalize Hilly's transactions that occurred during January. The company uses the allowance method. 2 3. Post Hilly's transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. - X Journalize Hilly's adjustment to record bad debts expense assuming Hilly estimates bad debts as 9% of accounts receivable on January 31, 2024. Post the adjustment to the appropriate T-accounts. 4. Show how Hilly Mountain Flagpoles will report net accounts receivable on its January 31, 2024, balance sheet. Print Done More info a Sales of $172,000 ($156,000 on account $16,000 for cash). Ignore Cost of Goods Sold. b. Collections on account, $124,000. c. Write-offs of uncollectible receivables, $2,200. Print Done - X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Solve the 7 parts
Transcribed Image Text:**Educational Exercise: Accounting for Hilly Mountain Flagpoles**
**At a Glance:**
At the start of the year, Hilly Mountain Flagpoles had an Accounts Receivable of $27,000 and an Allowance for Bad Debts with a balance of $3,000. Throughout January, the company recorded the following transactions.
**Requirements:**
1. **Journalize Transactions:**
- Record all transactions for January using the allowance method.
2. **Post to T-accounts:**
- Reflect all entries in the Accounts Receivable and Allowance for Bad Debts T-accounts.
3. **Adjust for Bad Debts:**
- Hilly estimates bad debts to be 9% of accounts receivable as of January 31, 2024. Make necessary adjustments.
4. **Report Net Accounts Receivable:**
- Present the net accounts receivable on the January 31, 2024 balance sheet.
**Transactions Detail:**
- **Sales:**
- Total sales of $172,000, including $156,000 on account and $16,000 in cash.
- **Collections:**
- Cash collections from accounts receivable amounted to $124,000.
- **Write-offs:**
- Write-offs of uncollectible receivables totaled $2,200.
**Journal Entry Table:**
- **Date:** January 2024
- **Accounts and Explanation:**
- No entries are provided; students should enter debits and credits based on transactions.
**Important Notes:**
- Ignore the Cost of Goods Sold in these transactions.
- Ensure that all debits are recorded before any credits.
This exercise guides students in applying the allowance method for accounting, handling accounts receivable, and assessing write-offs and adjustments for bad debts.
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