DJ's Auto Repair, Inc., ended December 2015 with Accounts Receivable of $8,500 and a credit balance in
Question:
DJ's Auto Repair, Inc., ended December 2015 with Accounts Receivable of $8,500 and a credit balance in Allowance for Uncollectible Accounts of $275. During January 2016, DJ's Auto Repair, Inc., completed the following transactions:
a. Sales of $85,000, which included $62,000 in credit sales and $23,000 of cash sales. Ignore cost of goods sold.
b. Cash collections on account, $66,000.
c. Write-offs of uncollectible receivables, $325.
d. Bad debt expense, estimated as 1% of credit sales.
Requirements
1. Prepare journal entries to record sales (ignore cost of goods sold), collections, write-offs of un-collectibles, and bad debt expense by the percent-of-sales method.
2. Calculate the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and net Accounts Receivable at January 31, 2016. How much does DJ's Auto Repair expect to collect?
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
Req 1 Journal DATE ACCOUNTS AND EXPLANATIONS POST REF Dr Cr a Cash 23000 ...View the full answer
