In 2016, Grant Corporation recorded credit sales of $3,200,000 and bad debts expenses of $42,000. Write-offs of uncollectible amounts total $39,000, and one account, worth $12,000, that had been written off an earlier year was collected in 2016.Prepare journal entries to record each transition.General JournalRecord, sales revenue for this yearRecord bad debt expense for the yearWrite off uncollectible debt for this yearReverse prior write off debt now collectedRecord collection of the reinstated account.If the net account receivables increased by $220,000, how much cash was collected from credit customers during the year? Prepare a journal entry to record cash collection.
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.
In 2016, Grant Corporation recorded credit sales of $3,200,000 and
Prepare journal entries to record each transition.
General Journal
Record, sales revenue for this year
Record bad debt expense for the year
Write off uncollectible debt for this year
Reverse prior write off debt now collected
Record collection of the reinstated account.
If the net
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