At the beginning of the current period, Whispering Winds Corp. had balances in Accounts Receivable of $260,000 and in Allowance for Doubtful Accounts of $11,700. During the period, it had net credit sales of $1,040,000 and collections of 5991,900. It wrote off as uncollectible accounts receivable of $9.490. Uncollectible accounts are estimated to total $32,500 at the end of the period. (Omit recording cost of goods sold) (a-c) Enter the beginning balances for Accounts Receivable and Allowance for Doubtful Accounts in a tabular summary. Use the summary to record transactions (a), (b), and (c) below. Record sales and collections during the period. (a) (b) Record the write-off of uncollectible accounts during the period. (c) Record bad debt expense for the period (Enter negative amounts using either a negative sign preceding the number eg-45 or parentheses eg (45)) Assets Liabilities Allow. For Cash Accts. Rec. Doubtful Accts Beg Bal $ (a) (b) (c) Common Stock Rev. $ Stockholders' Equity Retained Earnings Exp.
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.
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