Showbiz Sportswear completed the following selected transactions during 2008 & 2009: 2008 Dec. 31 Estimated that uncollectible-account (bad-debt) expense for the year was 1% of credit sales of $450,000 and recorded the amount as expense. Use the allowance method. Dec. 31 Made the closing entry for uncollectible-account expense. 2009 Feb. 4 Sold inventory to Marian Holt, $1,500 on account. Ignore cost of goods sold. Wrote off Marian Holt's account as uncollectible after repeated effort to collect from her. July 1 Nov. 19 Received $1,500 from Marian Holt, along with a letter apologizing for being so late. Reinstated Holt's account in full and recorded the cash receipt. Dec. 31 Made a compound entry to write off the following accounts as uncollectible: Kaycee Britt, $2,300; Tim Sands, $500 and Anna Chin, $1,200. Dec. 31 Estimated that uncollectible expense for the year was 1% of credit sales of $480,000, and recorded the expense Dec. 31 Made the closing entry for uncollectible-account expense. Requirements: a) Open general ledger accounts for Allowance for Uncollectible Accounts and Uncollectible-Accounts Expense. Keep running balances. All accounts begin with zero balance. b) Record the transactions in the general journal and post to the two ledger accounts. c) The December 31, 2009 balance of Accounts Receivable is $164,500. Show how Accounts Receivable would be reported on the balance sheet at that date.
Showbiz Sportswear completed the following selected transactions during 2008 & 2009: 2008 Dec. 31 Estimated that uncollectible-account (bad-debt) expense for the year was 1% of credit sales of $450,000 and recorded the amount as expense. Use the allowance method. Dec. 31 Made the closing entry for uncollectible-account expense. 2009 Feb. 4 Sold inventory to Marian Holt, $1,500 on account. Ignore cost of goods sold. Wrote off Marian Holt's account as uncollectible after repeated effort to collect from her. July 1 Nov. 19 Received $1,500 from Marian Holt, along with a letter apologizing for being so late. Reinstated Holt's account in full and recorded the cash receipt. Dec. 31 Made a compound entry to write off the following accounts as uncollectible: Kaycee Britt, $2,300; Tim Sands, $500 and Anna Chin, $1,200. Dec. 31 Estimated that uncollectible expense for the year was 1% of credit sales of $480,000, and recorded the expense Dec. 31 Made the closing entry for uncollectible-account expense. Requirements: a) Open general ledger accounts for Allowance for Uncollectible Accounts and Uncollectible-Accounts Expense. Keep running balances. All accounts begin with zero balance. b) Record the transactions in the general journal and post to the two ledger accounts. c) The December 31, 2009 balance of Accounts Receivable is $164,500. Show how Accounts Receivable would be reported on the balance sheet at that date.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 2
Showbiz Sportswear completed the following selected transactions during 2008 & 2009:
2008
Dec. 31 Estimated that uncollectible-account (bad-debt) expense for the year was 1% of credit
sales of $450,000 and recorded the amount as expense. Use the allowance method.
Dec. 31 Made the closing entry for uncollectible-account expense.
2009
Feb. 4
Sold inventory to Marian Holt, $1,500 on account. Ignore cost of goods sold.
Wrote off Marian Holt's account as uncollectible after repeated effort to collect from
her.
July 1
Nov. 19 Received $1,500 from Marian Holt, along with a letter apologizing for being so late.
Reinstated Holt's account in full and recorded the cash receipt.
Dec. 31 Made a compound entry to write off the following accounts as uncollectible: Kaycee
Britt, $2,300; Tim Sands, $500 and Anna Chin, $1,200.
Dec. 31 Estimated that uncollectible expense for the year was 1% of credit sales of $480,000,
and recorded the expense
Dec. 31 Made the closing entry for uncollectible-account expense.
Requirements:
a) Open general ledger accounts for Allowance for Uncollectible Accounts and
Uncollectible-Accounts Expense. Keep running balances. All accounts begin
with zero balance.
b) Record the transactions in the general journal and post to the two ledger
accounts.
c) The December 31, 2009 balance of Accounts Receivable is $164,500. Show
how Accounts Receivable would be reported on the balance sheet at that date.
Question 3
The June 30, 20X 7, balance sheet of Texas Golf Carts reports the following:
Accounts receivable....
Allowance for Uncollectible Accounts (Cr)....
$143,000
3,200
At the end of each quarter, Texas Gulf Carts estimates uncollectible account expense to be 1½%
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