Uncollectible accounts receivable written off $330,000 Collections on accounts receivable previously written off $60,000 Mutton estimates its provision of bad debts (uncollectible accounts), at the end of the fiscal year, based on the percentage of credit sales. The percentage used is 2%. Required: 1. Prepare the journal entry for December 31, 2004, to record the provision for bad debts expense in the box below. 2. Prepare a schedule, in good form, computing the balance in Mutton's Allowance for Doubtful Accounts. In other words, show the activity affecting this account during 2004, to arrive at the ending balance on December 31, 2004 in the box below.
Uncollectible accounts receivable written off $330,000 Collections on accounts receivable previously written off $60,000 Mutton estimates its provision of bad debts (uncollectible accounts), at the end of the fiscal year, based on the percentage of credit sales. The percentage used is 2%. Required: 1. Prepare the journal entry for December 31, 2004, to record the provision for bad debts expense in the box below. 2. Prepare a schedule, in good form, computing the balance in Mutton's Allowance for Doubtful Accounts. In other words, show the activity affecting this account during 2004, to arrive at the ending balance on December 31, 2004 in the box below.
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
Aa.60.
Transcribed Image Text:9382/quizzes/secured lockdown
Here Is some Information relating to sales and accounts revable For Mutton Corporation, a
retaller of prepackaged meat products, as of Dec 31, 2004:
Allowance for doubtful accounts, Jan 1, 2004
Cash Sales
Credit Sales
Uncollectible accounts receivable written off
$450,000
$15,000,000
$28,000,000
$330,000
Collections on accounts receivable previously written off $60,000
Mutton estimates its provision of bad debts (uncollectible accounts), at the end of the fiscal
year, based on the percentage of credit sales. The percentage used is 2%.
Required:
1. Prepare the journal entry for December 31, 2004, to record the provision for bad debts
expense in the box below.
2. Prepare a schedule, in good form, computing the balance in Mutton's Allowance for
Doubtful Accounts. In other words, show the activity affecting this account during 2004,
to arrive at the ending balance on December 31, 2004 in the box below.
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