Peru Industries began operations on January 1, 2020. During the next two years, the company completed a number of transactions involving credit sales, accounts receivable collections, and bad debts (assume a perpetual inventory system). These transactions are summarized as follows: 2020 Sold merchandise on credit for $2,340,000, terms n/30 (COGS = $1,294,000). Wrote off uncollectible accounts receivable in the amount of $35,800. Received cash of $1,402,000 in payment of outstanding accounts receivable. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible The company uses the allowance method to account for uncollectible. Calculate: (excel) Record the sales.(a) Record cost of sales.(a) Record written off uncollectible accounts.(b) Record collections from credit customers.(c) Record the estimate for uncollectible accounts.(d)

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...
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Peru Industries began operations on January 1, 2020. During the next two years, the company completed a number of transactions involving credit sales, accounts receivable collections, and bad debts (assume a perpetual inventory system). These transactions are summarized as follows:

2020

  1. Sold merchandise on credit for $2,340,000, terms n/30 (COGS = $1,294,000).
  2. Wrote off uncollectible accounts receivable in the amount of $35,800.
  3. Received cash of $1,402,000 in payment of outstanding accounts receivable.
  4. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible

The company uses the allowance method to account for uncollectible.

Calculate: (excel)

  • Record the sales.(a)
  • Record cost of sales.(a)
  • Record written off uncollectible accounts.(b)
  • Record collections from credit customers.(c)
  • Record the estimate for uncollectible accounts.(d)
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