Problem 5-2 (IAA) At the beginning of current year, Template Company showed the following account balances: 1,000,000 40,000 Accounts receivable Allowance for doubtful accounts The following summary transactions occurred during the current year: 7,000,000 1. Sales on account, 2/30, n/30 2. Collections from customers within the discount period 2,450,000 3. Collections from customers beyond the discount period 3,900,000 30,000 4. Accounts receivable written off as worthless 5. Recovery of accounts previously written off not included in the above collections 10,000 6. Credit memo for sales return 70,000 Required: a. Prepare journal entries pertaining to accounts receivable. b. Prepare the adjustment for doubtful accounts at year-end if the entity uses the percentage of accounts receivable method consistently. c. What is the net realizable value of accounts receivable at year-end?

Problem 5-2 (IAA) At the beginning of current year, Template Company showed the following account balances: 1,000,000 40,000 Accounts receivable Allowance for doubtful accounts The following summary transactions occurred during the current year: 7,000,000 1. Sales on account, 2/30, n/30 2. Collections from customers within the discount period 2,450,000 3. Collections from customers beyond the discount period 3,900,000 30,000 4. Accounts receivable written off as worthless 5. Recovery of accounts previously written off not included in the above collections 10,000 6. Credit memo for sales return 70,000 Required: a. Prepare journal entries pertaining to accounts receivable. b. Prepare the adjustment for doubtful accounts at year-end if the entity uses the percentage of accounts receivable method consistently. c. What is the net realizable value of accounts receivable at year-end?

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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