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Journal Entries for Credit Losses At the beginning of the year, Whitney Company had the following accounts on its books: Accounts Receivable $154,000 Debit Allowance
Journal Entries for Credit Losses At the beginning of the year, Whitney Company had the following accounts on its books:
Accounts Receivable | $154,000 | Debit |
Allowance for Doubtful Accounts | $7,900 | Credit |
During the year, credit sales were: | $1,133,000 | |
and collections on account were: | $1,120,000 |
The following transactions, among others, occurred during the year:
Feb.17 | Wrote off R. Lowell's account, | $3,300 |
May.28 | Wrote off G. Boyd's account, | $2,100 |
Oct.13 | Received $500 from G. Boyd, who is in bankruptcy proceedings, | |
in final settlement of the account written off on May 28. | ||
This amount is not included in the $1,120,000 collections. | ||
Dec.15 | Wrote off K. Marshall's account, | $1,400 |
Dec.31 | In an adjusting entry, recorded the allowance for doubtful accounts at | 0.5% |
of credit sales for the year. |
Required
a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.
a.
General Journal | |||
---|---|---|---|
Date | Description | Debit | Credit |
Dec.31 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | $Answer | $Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To record sales revenue for the year. | |||
Dec.31 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To record collections on account for the year. | |||
Feb.17 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To write off R. Lowell's account. | |||
May.28 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To write off G. Boyd's account. | |||
Oct.13 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To reinstate G. Boyd's account for partial recovery. | |||
Oct.13 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To record collection from G. Boyd. | |||
Dec.15 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To write-off K. Marshall's account. | |||
Dec.31 | AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer |
AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue | Answer | Answer | |
To record allowance for doubtful accounts. |
b.
AnswerAccounts ReceivableLess: Allowance for Doubtful Accounts | $Answer | ||
AnswerAccounts ReceivableLess: Allowance for Doubtful Accounts | Answer | ||
$Answer |
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