Transactions for 2024 1-Sales revenue on account, $113,600 (ignore Cost of Goods Sold). 2-Collections on account, $92,895 3-Write-offs of uncollectibles, $760. 4- The Company accepted a 90-day, 9%, $13,500 note receivable from a customer in exchange for 4 his account receivable. a Journalize the issuance of the note. b Journalize the collection of the principal and interest at maturity. (use 360 days) 5 Bad debts expense of $?? was recorded. (Refer to requirement 3)(about the write off) - while doing the transactions for 2024 assume the company uses the allowance method and show work and formulas
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.
Transactions for 2024
1-Sales revenue on account, $113,600 (ignore Cost of Goods Sold).
2-Collections on account, $92,895
3-Write-offs of uncollectibles, $760.
4- The Company accepted a 90-day, 9%, $13,500 note receivable from a customer in exchange for 4 his
a Journalize the issuance of the note.
b Journalize the collection of the principal and interest at maturity. (use 360 days)
5
- while doing the transactions for 2024 assume the company uses the allowance method and show work and formulas
Journal entry means the book of original entry where the first time transaction is recorded. After that ledger is prepared and trial balance is made.
Account receivable means the amount due from customer whom we sold the goods on credit.
Allowance for doubtful account is made to show estimate expense of bad debts even when actual bad debts has not occurred yet.
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