The company completed the following transactions during 2020.• Jan 10sold inventory to Natty Paul, $11,000, on account• May 15 wrote off as uncollectible the accounts of Terry Carter, $2,500 and Maggie Cube $400• August 04 received 70% of the amount owed by Natty Paul and wrote off the remainder asuncollectible• October 26 received 30% of the funds owed from Maggie Cube as part payment of her account whichhad been written off earlier as uncollectible.• December 31, The Aging schedule showed an estimated $116,500 as uncollectibleRequirements:1. Prepare journal entries for each transaction (No narrations required)2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on theinformation presented and balance off each account.3. Prepare the balance sheet extract as at Dec 31, 2020, to show the net realizable value for theAccounts Receivable.4. Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales areestimated to be uncollectible. Using the percentage of sales method:i. Determine the amount to be charged to the uncollectible expense account.ii. Prepare the Allowance for uncollectible account.iii. Prepare the balance sheet extract to show the net realizable value of the AccountsReceivable as at December 31.

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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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