E9-5 Sales, write-offs and bad debt recovery [10 min] Hi-Performance Mobile Phones sold $23000 of merchandise to Avery Trucking Company on account. Avery fell on hard times and paid only $8000 of the account receivable. After repeated attempts to collect, Hi-Performance finally wrote off its accounts receivable from Avery. Six months later Hi-Performance received Avery's cheque for $15000 with a note apologising for the late payment. Requirement Journalise for Hi-Performance: 1 Sale on credit, $23000 (ignore cost of sales). 2 Collection of $8000 on account. 3 Write-off of the remaining portion of the Avery account receivable. Hi-Performance uses the allowance method for bad debts. 4 Reinstatement of Avery's account receivable. 5 Collection in full from Avery, $15000.

E9-5 Sales, write-offs and bad debt recovery [10 min] Hi-Performance Mobile Phones sold $23000 of merchandise to Avery Trucking Company on account. Avery fell on hard times and paid only $8000 of the account receivable. After repeated attempts to collect, Hi-Performance finally wrote off its accounts receivable from Avery. Six months later Hi-Performance received Avery's cheque for $15000 with a note apologising for the late payment. Requirement Journalise for Hi-Performance: 1 Sale on credit, $23000 (ignore cost of sales). 2 Collection of $8000 on account. 3 Write-off of the remaining portion of the Avery account receivable. Hi-Performance uses the allowance method for bad debts. 4 Reinstatement of Avery's account receivable. 5 Collection in full from Avery, $15000.

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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P9.4
es E6-11 (Algo) Determining Financial Statement Effects of Bad Debts Using the Percentage of Credit Sales Method LO6-2 During the current year, Sun Electronics, Incorporated, recorded credit sales of $740,000. Based on prior experience, it estimates a 2 percent bad debt rate on credit sales. a. On November 13 of the current year, an account receivable for $270 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. Required: Indicate the effects of the transactions in the following table. Indicate the accounts affected and enter decreases to account categories with a minus sign. Transaction a. a. b. b. Assets Liabilities Stockholders' Equity
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