Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Benzton Inc. had sales of $1,200,000 during 2015. Twenty-five percent of these were cash sales. In addition to the 2015 cash sales, $569,400 of

image text in transcribed
image text in transcribed
1. Benzton Inc. had sales of $1,200,000 during 2015. Twenty-five percent of these were cash sales. In addition to the 2015 cash sales, $569,400 of the 2015 credit sales were collected during the year. $30,000 of accounts receivable were written off as being uncollectible during 2015. The December 31, 2014 Allowance for Doubtful Accounts was $16,400 credit balance. Also, the December 31, 2014 balance in the general ledger accounts receivable was $286,500: all of which was collected during 2015. In addition, $16,400 of thee accounts that were written off during 2014 were unexpectedly collected during 2015. On December 311 2015 Benzton completed an accounts receivable aging schedule. The following schedule provides the percent of the total accounts receivable by the category number of daysWT Accounts Category Receivable Age (days) Percentage 40 20 10 24 1-30 31-60 61-90 91-120 Over 120 Total NOTE: You will need to determine the accounts receivable December 31, 2015 ba lance and then you multiply the total accounts receivable amount by the above percentages. Page 1 of 4 Also, Benzton, based on 5 years of historical data, estimated the following percentages for each category that would be uncollectible at December 31, 2015: Estimated Loss percentage 2.5% 3.0% 4.25% 9% 45% Category Age (days) 1-30 31-60 61-90 91-120 Over 120 Required: NOTE: WHEN APPLICABLE ROUND ALL CALCULATIONS AND FINAL ANSWERS TO THE NEAREST WHOLE DOLLAR! 1) Prepare journal entries to record the following 2015 transactions: a. The write-off of $30,000 b. The recovery of $16, 400 general ledger account at December 31, 2015. December 31, 2015 for the accounts receivable that are estimated to 2) Recalculate the balance in the Allowance for Doubtful Accounts 3) Prepare the doubtful account adjusting entry to be recorded on be written-off during 2016

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing Assurance & Consulting Services

Authors: Kurt F Reading, Paul J Sobel, Urton L Anderson, Michael J Head, Sri Ramamoorti

1st Edition

ISBN: 0894136100, 9780894136108

More Books

Students also viewed these Accounting questions

Question

undertake a thematic analysis of your data;

Answered: 1 week ago