Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Part B The company completed the following transactions during 2020. Jan 10 sold inventory to Natty Paul, $11,000, on account May 15 wrote off as
Part B
The company completed the following transactions during 2020.
- Jan 10 sold inventory to Natty Paul, $11,000, on account
- May 15 wrote off as uncollectible the accounts of Terry Carter, $2,500 and Maggie Cube $400
- August 04 received 70% of the amount owed by Natty Paul and wrote off the remainder as uncollectible
- October 26 received 30% of the funds owed from Maggie Cube as part payment of her account which had been written off earlier as uncollectible.
- December 31, The Aging schedule showed an estimated $116,500 as uncollectible
Requirements:
- Prepare journal entries for each transaction (No narrations required)
- Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account.
- Prepare the balance sheet extract as at Dec 31, 2020, to show the net realizable value for the Accounts Receivable.
- Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:
- Determine the amount to be charged to the uncollectible expense account.
- Prepare the Allowance for uncollectible account.
- Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started