Analyzing Accounts Receivable Changes In 2016, Grant Corporation recorded credit sales of $320,000 and bad debts expense of $4,200. Write-offs of uncollectible accounts totaled $3,900 and one account, worth $1,200, that had been written off in an earlier year was collected in 2016. a. Prepare journal entries to record each of these transactions. b. If net accounts receivable increased by $22,000, how much cash was collected from credit customers during the year? Prepare a journal entry to record cash collections. c. Set up T-accounts and post each of the transactions in parts a and b to them. d. Record each of the above transactions in the financial statement effects template to show the effect of these entries on the balance sheet and income statement.

a. Prepare journal entries to record each of these transactions. General Journal Ref. Description Debit Credit (0) 0 0 To record sales revenue for the year. 0 0 > 0 0 0 0 To record bad debt expense for the year. (iii) > 0 0 > 0 0 To write-off uncollectible accounts for the year. (iv) O 0 0 0 0 To reverse prior write-off now deemed collectible. (v) > 0 0 0 0 To record collection of reinstated account. b. If net accounts receivable increased by $22,000, how much cash was collected from credit customers during the year? Hint: Include the $1,200 recovery above. Cash collected during the year: $ 0 Prepare a journal entry to record cash collections. (Hint: Do not include the $1,200 already included in the journal entries above.) Description Debit Credit Ref. (vi) 0 0 0 0 To record cash collections from customers during the year. C. Set up T-accounts and post each of the transactions in parts a and b to them. Cash (A) Accounts Receivable (A) 0 0 Sales Revenue (R) 0 Bad Debts Expense (E) 0 0 (0) 0 0 (0) (0) 0 (1) (1) (ii) Allowance for Uncollectibles (XA) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (iii) 0 (ii) (111) ( (iv) 0 0 0 0 (iii) 0 0 (iv) 0 0 0 0 0 0 (iv) 0 0 (iv) 0 0 (iv) (v) (v) 0 0 (v) 0 0 0 0 0 0 0 0 (v) (vi) (v) (vi) 0 0 (vi) 0 0 (vi) 0 0 0 0 0 0 (vi) Balance 0 0 Balance 0 0 Balance 0 0 Balance 0 0 Balance 0 0 d. Record each of the above transactions in the financial statement effects template to show the effect of these entries on the balance sheet and income statement. Note: Use a negative sign with answers, when appropriate. Income Statement Noncash Asset = + + - Balance Sheet Contra Assets Liabilities 0 = 0 + 0 = O + 0 = 0 + Contrib. Capital 0 + 0 + Earned Capital 0 Revenues 0 Expenses = Net Income 0 = = 0 0 0 0 0 0 = 0 Transaction Cash Asset + (0) 0 + (ii) 0 + (iii) 0 + (iv) 0 + (v) 0 + (vi) 0 + 0 0 + 0 0 0 = 0 0 0 = 0 + 0 0 - 0 = 0 0 + 0 + 0 0 = 0 + 0 0 0 = 0 0 0 = 0 + 0+ 0 0 0 = 0