CHECK OUT: 1. At December 31, 2013, XYZ Co. reported the following information on its balance sheet: Accounts receivable $960,000 Less: Allowance for doubtful accounts 80,000 During 2014, the company had the following transactions related to receivables. 1. Sales on account of $3,700,000 2. Sales returns and allowances 50,000 3. Collections of accounts receivable 2,810,000 4. Write-offs of accounts receivable deemed uncollectible 90,000 5. Recovery of bad debts previously written off as uncollectible 29,000 Instructions: A. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. B. Enter January 1, 2014, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances. C. Prepare the journal entry to record bad debt expense for 2014, if the aging of accounts receivable indicates that expected bad debts are $115,000.

CHECK OUT: 1. At December 31, 2013, XYZ Co. reported the following information on its balance sheet: Accounts receivable $960,000 Less: Allowance for doubtful accounts 80,000 During 2014, the company had the following transactions related to receivables. 1. Sales on account of $3,700,000 2. Sales returns and allowances 50,000 3. Collections of accounts receivable 2,810,000 4. Write-offs of accounts receivable deemed uncollectible 90,000 5. Recovery of bad debts previously written off as uncollectible 29,000 Instructions: A. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. B. Enter January 1, 2014, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances. C. Prepare the journal entry to record bad debt expense for 2014, if the aging of accounts receivable indicates that expected bad debts are $115,000.

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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