Chapter 9, Problem P9.43CP

To determine

Account Receivables: For any delivered goods or services, the cash owed by the customers that they need to pay to the business is called account receivables. In the balance sheet the account receivables are shown as Assets.

Journal entry: Journal entry means logging the debits and credits with their respective dates and account names. All the transactions will be logged in a chronological order in a Journal.

Determine the following with reference to the books of the Canyon Canoe Company-

1. Amount of Bad Debts by –

a. Percentage of sales method

b. Percentage of receivables method

c. Ageing of receivables method

2. Journal entry of Bad debts recorded by percentage of sales method

3. Journal entry of write-off of the Early Start Daycare invoice

4. Prepare T-accounts for Accounts receivable and allowance for bad debts before requirements of 2 and 3. Post the entries of 2 and 3 in the accounts. Assume a zero beginning balance of the Allowance of Bad debts.

5. Show how the net accounts receivables will be reported in the balance sheet of the company as on June 30, 2019.