Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Accounts Receivable 420,000 Dec. 31/19 Balance Allowance for Doubtful Accounts 19,200 Dec. 31/19 Balance During 2020, the following selected transactions occurred: a. Sales totalled $2,810,000, of which 25% were cash sales (cost of sales $1,813,000). b. Sales returns were $115,000, half regarding credit sales. The returned merchandise was scrapped. c. An account for $31,000 was recovered. d. Several accounts were written off: $33,000. e. Collections from credit customers totalled $1,770,000 (excluding the recovery in (c) above). Part A Required: 1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivab Allowance for Doubtful Accounts. Answer is complete and correct.

Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Accounts Receivable 420,000 Dec. 31/19 Balance Allowance for Doubtful Accounts 19,200 Dec. 31/19 Balance During 2020, the following selected transactions occurred: a. Sales totalled $2,810,000, of which 25% were cash sales (cost of sales $1,813,000). b. Sales returns were $115,000, half regarding credit sales. The returned merchandise was scrapped. c. An account for $31,000 was recovered. d. Several accounts were written off: $33,000. e. Collections from credit customers totalled $1,770,000 (excluding the recovery in (c) above). Part A Required: 1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivab Allowance for Doubtful Accounts. Answer is complete and correct.

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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Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end:
Accounts Receivable
Dec. 31/19 Balance
During 2020, the following selected transactions occurred:
a. Sales totalled $2,810,000, of which 25% were cash sales (cost of sales $1,813,000).
b. Sales returns were $115,000, half regarding credit sales. The returned merchandise was scrapped.
c. An account for $31,000 was recovered.
No
Allowance for Doubtful Accounts
d. Several accounts were written off: $33,000.
e. Collections from credit customers totalled $1,770,000 (excluding the recovery in (c) above).
Part A
1
420,000
Required:
1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivable and
Allowance for Doubtful Accounts.
2
19,200 Dec. 31/19 Balance
Transaction
a(1)
a(2)
Cash
Accounts receivable
Sales
Cost of goods sold
Answer is complete and correct.
General Journal
>
Debit
702,500
2,107,500
1,813,000
Credit
2,810,000

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