Question
Accounts Receivable Journal Entries 3. On January 1 of the current year, Neptune, Inc. had the following accounts on its books: Accounts Receivable $240,000 (debit)
Accounts Receivable Journal Entries
3. On January 1 of the current year, Neptune, Inc. had the following accounts on its books:
Accounts Receivable $240,000 (debit)
Allowance for Doubtful Accounts $8,000 (credit)
During this year, credit sales were $1,200,000 and collections on account were $1,160,000.
Required:
a. Prepare general journal entries for the following transactions that occurred during the year:
(1) Wrote off N. Purcells account, $6,800.
(2) Wrote off J. Steins account, $2,400.
(3) J. Stein, who is in bankruptcy, paid $800 in final settlement of the account written off in transaction
(2). This amount is not included in the $1,160,000 collections.
(4) On December 31, estimated the years bad debts expense at 1% of credit sales.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the year-end balance sheet.
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