Required: 1. Using the following categories, indicate the effect of each listed transaction, including the write-off of the uncollectible account and the adjusting entry for estimated bad debts (ignore cost of goods sold). The first transaction is used as an example. (Round your answers to the nearest whole dollar amount. Any decrease in account balances should be indicated by a minus sign.) Transaction Sales Revenue Sales Discounts (taken) Sales Returns and Bad Debt Expense Allowances a. $ 260,000 b. C. d. e. f. g. h. i. j. k. I. m. Total $ 260,000 $ 0 0 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
December 31, current year.
Balances January 1, current year
Accounts receivable (various customers) $ 120,000
Allowance for doubtful accounts 9,000
In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 4/10,
n30 (assume a unit sales price of $700 in all transactions).
Transactions during current year
a. Sold merchandise for cash, $260,000.
b. Sold merchandise to R. Smith; invoice price, $9,000.
c. Sold merchandise to K. Miller; invoice price, $23,000.
d. Two days after purchase date, R. Smith returned one of the units purchased in (b) and received account credit.
e. Sold merchandise to B. Sears; invoice price, $26,000.
f. R. Smith paid his account in full within the discount period.
g. Collected $93,000 cash from customer sales on credit in prior year, all within the discount periods.
h. K. Miller paid the invoice in (c) within the discount period.
i. Sold merchandise to R. Roy; invoice price, $25,500.
j. Three days after paying the account in full, K. Miller returned seven defective units and received a cash refund.
k. After the discount period, collected $5,000 cash on an account receivable on sales in a prior year.
I. Wrote off a prior year account of $3,000 after deciding that the amount would never be collected.
m . The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns.
 
 
Required:
1. Using the following categories, indicate the effect of each listed transaction, including the write-off of the uncollectible account and
the adjusting entry for estimated bad debts (ignore cost of goods sold). The first transaction is used as an example. (Round your
answers to the nearest whole dollar amount. Any decrease in account balances should be indicated by a minus sign.)
Transaction
Sales
Revenue
Sales
Discounts
(taken)
Sales
Returns and
Bad Debt
Expense
Allowances
a.
$
260,000
b.
C.
d.
e.
f.
g.
h.
i.
j.
k.
I.
m.
Total
$ 260,000 $
0
0
0
Transcribed Image Text:Required: 1. Using the following categories, indicate the effect of each listed transaction, including the write-off of the uncollectible account and the adjusting entry for estimated bad debts (ignore cost of goods sold). The first transaction is used as an example. (Round your answers to the nearest whole dollar amount. Any decrease in account balances should be indicated by a minus sign.) Transaction Sales Revenue Sales Discounts (taken) Sales Returns and Bad Debt Expense Allowances a. $ 260,000 b. C. d. e. f. g. h. i. j. k. I. m. Total $ 260,000 $ 0 0 0
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education