Swifty Corp.’s balance sheet at December 31, 2016, included the following. Note receivable $660,000 Interest receivable 36,000 Accounts receivable 1,415,000 Less: Allowance for doubtful accounts receivable 95,000 1,320,000 $2,016,000 The following occurred in 2017. 1. Swifty made sales of $10,540,000. All sales were credit sales. Swifty allows some discounts for early payment of receivables and uses the gross method to record sales. 2. Customer accounts of $83,500 were written off during the year. 3. Accounts receivable of $10,640,000 were collected. Collections for the year included $200,000 of accounts on which 1% sales discounts were allowed. 4. $12,500 was received in payment of an account which was written off the books as worthless in 2016. 5. At year-end (December 31, 2017), Swifty estimated that its Allowance for Doubtful Accounts needed a balance of $73,000. This estimate is based on an analysis of aged accounts receivable. 6. The note receivable and related interest were due January 1, 2017. Young collected both, in full, on that date. Prepare all journal entries necessary to reflect the transactions above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

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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Swifty Corp.’s balance sheet at December 31, 2016, included the following.

Note receivable		$660,000
Interest receivable		36,000
Accounts receivable	1,415,000
Less: Allowance for doubtful accounts receivable	95,000	1,320,000
		$2,016,000

The following occurred in 2017.

1.		Swifty made sales of $10,540,000. All sales were credit sales. Swifty allows some discounts for early payment of receivables and uses the gross method to record sales.
2.		Customer accounts of $83,500 were written off during the year.
3.		Accounts receivable of $10,640,000 were collected. Collections for the year included $200,000 of accounts on which 1% sales discounts were allowed.
4.		$12,500 was received in payment of an account which was written off the books as worthless in 2016.
5.		At year-end (December 31, 2017), Swifty estimated that its Allowance for Doubtful Accounts needed a balance of $73,000. This estimate is based on an analysis of aged accounts receivable.
6.		The note receivable and related interest were due January 1, 2017. Young collected both, in full, on that date.

Prepare all journal entries necessary to reflect the transactions above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)