P8-2A Silk Co. reported the following information on its December 31, 2014, Accounts receivable Less: Allowance for doubtful accounts $760,000 ons; 76,000 sen- During 201 the company had the following transactions related to receivables: Sales on account, $2,800,000 Sales returns and allowances, $325,000 Collections of accounts receivable, $2,410,000 Interest added to overdue accounts, $72,000 Write offs of accounts consider uncollectible, $58,400 Collection of accounts previously written off as uncollectible, $5,2 Instructions (a) Prepare the summary journal entries to record each of these six transacti (b) Enter the December 31, 2014, balances in the Accounts Receivable and Allowance for Doubtful Accounts general ledger accounts, post the entries

P8-2A Silk Co. reported the following information on its December 31, 2014, Accounts receivable Less: Allowance for doubtful accounts $760,000 ons; 76,000 sen- During 201 the company had the following transactions related to receivables: Sales on account, $2,800,000 Sales returns and allowances, $325,000 Collections of accounts receivable, $2,410,000 Interest added to overdue accounts, $72,000 Write offs of accounts consider uncollectible, $58,400 Collection of accounts previously written off as uncollectible, $5,2 Instructions (a) Prepare the summary journal entries to record each of these six transacti (b) Enter the December 31, 2014, balances in the Accounts Receivable and Allowance for Doubtful Accounts general ledger accounts, post the entries

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

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.

Question

P8-2A Silk Co. reported the following information on its December 31, 2014, Accounts
receivable Less: Allowance for doubtful accounts $760,000 ons; 76,000 sen- During 2015,
the company had the following transactions related to receivables: Sales on account,
$2,800,000 Sales returns and allowances, $325,000 Collections of accounts receivable,
$2,410,000 Interest added to overdue accounts, $72,000 Write offs of accounts considered
uncollectible, $58,400 Collection of accounts previously written off as uncollectible, $5,200
Instructions (a) Prepare the summary journal entries to record each of these six transactions.
(b) Enter the December 31, 2014, balances in the Accounts Receivable and Allowance for
Doubtful Accounts general ledger accounts, post the entries

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