Jayco Inc. started its operations in 2022. Its sales during 2022, all on account, totalled $700,000. The company collected $500,000 in cash from customers during the year and wrote off $8,000 in uncollectible accounts. The company set up an allowance for doubtful accounts at December 31, 2022, Its fiscal year-end, and determined the account balance to be $14,000. The unadjusted balances of selected accounts at December 31, 2023 are as follows: Accounts receivable Allowance for doubtful accounts (debit) Sales revenue (including 80 percent in sales on account) $300,000 10,000 800,000 Aging of the accounts receivable on December 31, 2023, resulted in an estimate of $11,000 in potentially uncollectible accounts. Required: 1. Prepare the journal entries to record all the transactions during 2022 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) * Answer is complete but not entirely correct. No A Transaction 1 General Journal Accounts receivable Sales revenue B 2 Cash Accounts receivable Debit 700,000 Credit 700,000 500,000 500,000 0 3 Allowance for doubtful accounts 8,000 Accounts receivable 8,000 D 4 Bad debt expense 4,000 x Allowance for doubtful accounts 4,000 x x Answer is not complete. Accounts Receivable Allowance for Doubtful Accounts Beg. bal Beg. bal 0 Credit sales 700,000 Write-offs x Bad debt expense x 500,000 8,000 End. bal. 192,000 End. bal. 4,000 Write-offs Collections 8,000 4,000 x Jayco Inc. started its operations in 2022. Its sales during 2022, all on account, totalled $700,000. The company collected $500,000 in cash from customers during the year and wrote off $8,000 in uncollectible accounts. The company set up an allowance for doubtful accounts at December 31, 2022, Its fiscal year-end, and determined the account balance to be $14,000. The unadjusted balances of selected accounts at December 31, 2023 are as follows: Accounts receivable Allowance for doubtful accounts (debit) Sales revenue (including 88 percent in sales on account) $300,000 10,000 800,000 Aging of the accounts receivable on December 31, 2023, resulted in an estimate of $11,000 in potentially uncollectible accounts. Required: 1. Prepare the journal entries to record all the transactions during 2022 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) × Answer is complete but not entirely correct. No A Transaction 1 General Journal Accounts receivable Debit 700,000 Credit Sales revenue 700,000 B 2 Cash Accounts receivable 500,000 500,000 C 3 Allowance for doubtful accounts 8,000 ✔ Accounts receivable 8,000 D 4 Bad debt expense Allowance for doubtful accounts 4,000 x 4,000 x x Answer is not complete. Accounts Receivable Beg. bal 700,000✔ Credit sales Write-offs x Bad debt expense x 500,000 8,000 End. bal. 192,000 End. bal. 4,000 Beg. bal. Write-offs Collections Allowance for Doubtful Accounts 0 ✔ 8,000✔ 4,000 x 2. Prepare the journal entries to record all the transactions during 2023 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) × Answer is complete but not entirely correct. No Transaction General Journal Debit Credit A 1 Accounts receivable Cash 640,000 160,000 Sales revenue 800,000 B 2 Accounts receivable x 4,000 x Allowance for doubtful accounts x 4,000 x C 3 Cash Accounts receivable D 4 Bad debt expense 500,000 x 500,000 x Allowance for doubtful accounts 5,000 x 5,000 x × Answer is not complete. Accounts Receivable x 192,000 → 640,000✔ 4,000 x Beg. bal. Allowance for Doubtful Accounts 4,000 x Write-offs 500,000 x Bad debt expense x Unadj. Bal 4,000 x 5,000 x 5,000 Beg. bal Credit sales Write-offs Bad debt expense × End. bal. 336,000 End. bal. 5,000 3. Compute the receivables turnover ratio and the average collection period for 2023. (Use 365 days a year. Round "Receivables turnover" to 2 decimal places and other answer to nearest whole number.) × Answer is complete but not entirely correct. Receivables turnover 2.01 x times Average collection period 181 x days 4. Does the write-off of accounts receivable affect the current ratio? Yes No 5. Does the recording of bad debt expense affect the receivables turnover ratio? Yes No

Jayco Inc. started its operations in 2022. Its sales during 2022, all on account, totalled $700,000. The company collected $500,000 in cash from customers during the year and wrote off $8,000 in uncollectible accounts. The company set up an allowance for doubtful accounts at December 31, 2022, Its fiscal year-end, and determined the account balance to be $14,000. The unadjusted balances of selected accounts at December 31, 2023 are as follows: Accounts receivable Allowance for doubtful accounts (debit) Sales revenue (including 80 percent in sales on account) $300,000 10,000 800,000 Aging of the accounts receivable on December 31, 2023, resulted in an estimate of $11,000 in potentially uncollectible accounts. Required: 1. Prepare the journal entries to record all the transactions during 2022 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) * Answer is complete but not entirely correct. No A Transaction 1 General Journal Accounts receivable Sales revenue B 2 Cash Accounts receivable Debit 700,000 Credit 700,000 500,000 500,000 0 3 Allowance for doubtful accounts 8,000 Accounts receivable 8,000 D 4 Bad debt expense 4,000 x Allowance for doubtful accounts 4,000 x x Answer is not complete. Accounts Receivable Allowance for Doubtful Accounts Beg. bal Beg. bal 0 Credit sales 700,000 Write-offs x Bad debt expense x 500,000 8,000 End. bal. 192,000 End. bal. 4,000 Write-offs Collections 8,000 4,000 x Jayco Inc. started its operations in 2022. Its sales during 2022, all on account, totalled $700,000. The company collected $500,000 in cash from customers during the year and wrote off $8,000 in uncollectible accounts. The company set up an allowance for doubtful accounts at December 31, 2022, Its fiscal year-end, and determined the account balance to be $14,000. The unadjusted balances of selected accounts at December 31, 2023 are as follows: Accounts receivable Allowance for doubtful accounts (debit) Sales revenue (including 88 percent in sales on account) $300,000 10,000 800,000 Aging of the accounts receivable on December 31, 2023, resulted in an estimate of $11,000 in potentially uncollectible accounts. Required: 1. Prepare the journal entries to record all the transactions during 2022 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) × Answer is complete but not entirely correct. No A Transaction 1 General Journal Accounts receivable Debit 700,000 Credit Sales revenue 700,000 B 2 Cash Accounts receivable 500,000 500,000 C 3 Allowance for doubtful accounts 8,000 ✔ Accounts receivable 8,000 D 4 Bad debt expense Allowance for doubtful accounts 4,000 x 4,000 x x Answer is not complete. Accounts Receivable Beg. bal 700,000✔ Credit sales Write-offs x Bad debt expense x 500,000 8,000 End. bal. 192,000 End. bal. 4,000 Beg. bal. Write-offs Collections Allowance for Doubtful Accounts 0 ✔ 8,000✔ 4,000 x 2. Prepare the journal entries to record all the transactions during 2023 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) × Answer is complete but not entirely correct. No Transaction General Journal Debit Credit A 1 Accounts receivable Cash 640,000 160,000 Sales revenue 800,000 B 2 Accounts receivable x 4,000 x Allowance for doubtful accounts x 4,000 x C 3 Cash Accounts receivable D 4 Bad debt expense 500,000 x 500,000 x Allowance for doubtful accounts 5,000 x 5,000 x × Answer is not complete. Accounts Receivable x 192,000 → 640,000✔ 4,000 x Beg. bal. Allowance for Doubtful Accounts 4,000 x Write-offs 500,000 x Bad debt expense x Unadj. Bal 4,000 x 5,000 x 5,000 Beg. bal Credit sales Write-offs Bad debt expense × End. bal. 336,000 End. bal. 5,000 3. Compute the receivables turnover ratio and the average collection period for 2023. (Use 365 days a year. Round "Receivables turnover" to 2 decimal places and other answer to nearest whole number.) × Answer is complete but not entirely correct. Receivables turnover 2.01 x times Average collection period 181 x days 4. Does the write-off of accounts receivable affect the current ratio? Yes No 5. Does the recording of bad debt expense affect the receivables turnover ratio? Yes No

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...

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