Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

AR problem using the Percent of Sales Method The A/R Account had a $45,000 debit balance on Jan 1 The Allowance for Doubtful Accounts had

AR problem using the Percent of Sales Method

The A/R Account had a $45,000 debit balance on Jan 1

The Allowance for Doubtful Accounts had a 4,000 credit balance on Jan 1.

Credit Sales Rev Reported each Month were:

225,000 in Jan 290,000 in Feb

Cash Collection from AR customers each month were:

210,000 collected in Jan 276,350 collected in Feb

Writeoffs of uncollectible accounts in each month were:

3,800 written off in Jan 6,100 written off in Feb

A/R account balance at the end of each month were:

56,250 on Jan 31 63,800 on Feb 28

Assume that this company used the % of sales method to estimate its bad debts

Bad Debts are estimated on a monthly basis by figurnig 2% of credit sales.

1. Prepare the adjusting JE for estimated bad debt ex as of Jan 31 and Feb 28

2.Show the T account for the allowance for Doubtful Accounts as for Jan and Feb

3.Show the Balace Sheet Presentation for A/R as of Jan 31 and Feb 28

Hint: For 3. the balance sheet presentation must show the net A/R- this is the A/R balance less the Allowance balance. You must find the endning Allowance balance in 2.

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

Environmental Health And Safety Audits A Compendium Of Thoughts And Trends

Authors: Lawrence B. Cahill

2nd Edition

1598889737, 978-1598889734

More Books

Students also viewed these Accounting questions

Question

3. Where is the job to be accomplished?

Answered: 1 week ago