Question
Donovan Carrier Corp has an Accounts Receivable balance of $1,265,000 and an allowance for uncollectible accounts of $99,500(credit) as of 12/31/19. In 2020 they have
Donovan Carrier Corp has an Accounts Receivable balance of $1,265,000 | |
and an allowance for uncollectible accounts of $99,500(credit) as of 12/31/19. | |
In 2020 they have credit sales of $2,900,000, cash collections on account of $3,150,000, | |
and uncollectible account write-offs of $109,000. Their financial manager estimates | |
15% of their accounts receivables will be uncollectible on December 31, 2020. |
REQUIREMENT 1: Provide the journal entry for Donovan for the credit sales for 2020.
REQUIREMENT 2: Provide the journal entry for Donovan for the cash collections for 2020.
REQUIREMENT 3: Provide the journal entry for Donovan for the account write-offs for 2020.
REQUIREMENT 4: Provide the adjusting journal entry for Donovan for the bad debt expense on December 31, 2020.
REQUIREMENT 5: Provide the needed Allowance for Uncollectible Accounts balance as of 12/31/20 per the above facts.
REQUIREMENT 6: Provide the Net Realizable Value of Accounts Receivable as of 12/31/20 after adjustment.
(Hint: You should use T-Accounts to analyze the Accounts Receivable and Allowance for Uncollectible Accounts balances)
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