Ray Neil is a multinational dealer of uniforms for medical personnel. On January 1, 2017, Ray's had thefollowing account balances:$27,000Accounts ReceivableLess Allowance for Doubtful Accounts(4,000)$23,000Net Accounts ReceivableRequired:i. During 2017, Ray's wrote off $6,000 in uncollectible accounts. Make this journal entry.ii. One account in the amount of $500 that had been written off in (i) above was collected. Make thejournal entries to reinstate the account and show its collection.iii. During 2017, Ray's made credit sales of $145,000 and collected $115,000 of accounts receivable.Record these journal entries.iv. At the end of the year, Ray's determines that approximately 7 percent of its ending accountsreceivable balance will not be collected. Ray's uses the percentage of receivables method ofcalculating bad debts. Make the necessary journal entry.

Journal entries are entries which record double affect of a financial transaction.

Answered: Lay's wrote off $6

Business

Accounting

Lay's wrote off $6

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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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Ray Neil is a multinational dealer of uniforms for medical personnel. On January 1, 2017, Ray's had the
following account balances:
$27,000
Accounts Receivable
Less Allowance for Doubtful Accounts
(4,000)
$23,000
Net Accounts Receivable
Required:
i. During 2017, Ray's wrote off $6,000 in uncollectible accounts. Make this journal entry.
ii. One account in the amount of $500 that had been written off in (i) above was collected. Make the
journal entries to reinstate the account and show its collection.
iii. During 2017, Ray's made credit sales of $145,000 and collected $115,000 of accounts receivable.
Record these journal entries.
iv. At the end of the year, Ray's determines that approximately 7 percent of its ending accounts
receivable balance will not be collected. Ray's uses the percentage of receivables method of
calculating bad debts. Make the necessary journal entry.

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