Question
I need help with this question! The information needed is below along with what I need help doing. Please no screenshot or photo answers if
I need help with this question!
The information needed is below along with what I need help doing. Please no screenshot or photo answers if possible, as I have problems understanding those type of things. ---->
Goff Company allows select customers to charge, all other customers must use the Access Credit Card. The Access Co. charges a 2% fee and remits payment to the company once per month. Goff Co. directly writes off any debt that is determined to be uncollectible. The company also used the allowance method for estimating bad debts. Goff Company had the following transactions related to credit card sales and bad debts in the month of December.
Dec. 1
Sold merchandise to a customer using the Access credit card. The merchandise was sold for $600 and had cost $230.
Dec. 3
Sold merchandise on credit to a frequent customer. The merchandise had cost $1,200 and was sold for $2,050.
Dec. 10
The Account Receivable from S. Smith of $200 is uncollectible. The receivable has been on the books for over a year.
Dec. 12
Sold merchandise on credit to a frequent customer. The merchandise had cost $3,500 and was sold for $1,099.
Dec. 15
Sold merchandise to a customer using the Access credit card. The merchandise was sold for $800 and had cost$650.
Dec. 17
Sold merchandise on credit to a frequent customer. The merchandise had cost $2,000 and was sold for $1,050.
Dec. 21
Collected the balance due from the Dec. 3 sale.
Dec. 25
Collected the balance due from the Access Co.
Dec. 31
Recorded the allowance for bad debts for the month.Based on previous experience the bad debts are estimated to be 2% of all outstanding receivables.
Required:
1. Prepare the necessary journal entries for these transactions.
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