Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of year 1, accounts receivable were presented in the company's balance sheet as follows. Accounts receivable from clients Less: Allowance for doubtful accounts $3,100, 000 80, 000 During year 2 $165,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $15,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indicated a need for a $90,000 allowance to cover possible failure to collect the accounts currently outstanding. Wilcox Mills makes adjusting entries for uncollectible accounts only at year-end. Required: a. Prepare the following general journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. One entry to summarize all accounts written off against the Allowance for Doubtful Accounts during year 2. 2 Entries to record the $15,000 in accounts receivable that were subsequently collected. 3. The adjusting entry required at December 31, year 2, to increase the Allowance for Doubtful Accounts to $90,000.
Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of year 1, accounts receivable were presented in the company's balance sheet as follows. Accounts receivable from clients Less: Allowance for doubtful accounts $3,100, 000 80, 000 During year 2 $165,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $15,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indicated a need for a $90,000 allowance to cover possible failure to collect the accounts currently outstanding. Wilcox Mills makes adjusting entries for uncollectible accounts only at year-end. Required: a. Prepare the following general journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. One entry to summarize all accounts written off against the Allowance for Doubtful Accounts during year 2. 2 Entries to record the $15,000 in accounts receivable that were subsequently collected. 3. The adjusting entry required at December 31, year 2, to increase the Allowance for Doubtful Accounts to $90,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Acct 102 - Do What You Can, Thank You!
Transcribed Image Text:Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of
year 1, accounts receivable were presented in the company's balance sheet as follows.
Accounts receivable from clients
Less: Allowance for doubtful accounts
$3,100,000
80,000
During year 2, $165,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables
totaling $15,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indícated a need for a $90,000
allowance to cover possible failure to collect the accounts currently outstanding.
Wilcox Mills makes adjusting entries for uncollectible accounts only at year-end.
業
Required:
a. Prepare the following general journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in
the first account field.)
1. One entry to summarize all accounts written off against the Allowance for Doubtful Accounts during year 2.
2 Entries to record the $15,000 in accounts receivable that were subsequently collected.
3. The adjusting entry required at December 31, year 2, to increase the Allowance for Doubtful Accounts to $90,000.
View transaction list
Journal entry worksheet
3
4
Record the write-off of receivables throughout the year.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
01
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