The sales, all on account, of the Nelson Company in 1978, its first year of operations, were
Question:
The sales, all on account, of the Nelson Company in 1978, its first year of operations, were \(\$ 600,000\). Collections totaled \(\$ 550,000\). On December 31, 1978, it was estimated that 1.5 percent of sales on account would probably be uncollectible. On that date, specific accounts in the amount of \(\$ 3,000\) were written off.
The company's unadjusted trial balance (but after all non-adjusting eniries were made) on December 31, 1979, included the following accounts and balances:
It was concluded that the estimated uncollectible account rate of 1.5 percent of sales should be applied to 1979 operations and an appropriate adjusting entry is made.
Present journal entries to portray the following:
a Transactions and adjustments of 1978 related to sales and customers' accounts.
b Transactions of 1979 resulting in the above trial balance amounts.
c Adjustment for estimated uncollectibles for 1979.
Step by Step Answer:
Financial Accounting An Introduction To Concepts Methods And Uses
ISBN: 9780030452963
2nd Edition
Authors: Sidney Davidson, Roman L. Weil, Clyde P. Stickney