Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Peru Industries began operations on January 1, 2023. During the next two years, the company completed a number of transactions involving credit sales, accounts receivable

Peru Industries began operations on January 1, 2023. During the next two years, the company completed a number of transactions involving credit sales, accounts receivable collections, and bad debts (assume a perpetual inventory system). These transactions are summarized as follows: 2023 a. Sold merchandise on credit for $2,330,000, terms n/30 (COGS = $1,288,000). b. Wrote off uncollectible accounts receivable in the amount of $35,600. c. Received cash of $1,394,000 in payment of outstanding accounts receivable. d. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible. 2024 e. Sold merchandise on credit for $3,052,000, terms n/30 (COGS = $1,664,000). f. Wrote off uncollectible accounts receivable in the amount of $55,400. g. Received cash of $2,306,000 in payment of outstanding accounts receivable. h. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible. Company uses the allowance method to account for uncollectible. Required: Prepare journal entries to record Peru's 2023 and 2024 summarized transactions and the adjusting entries to record bad debt expense at the end of each year. (Round your intermediate calculations and final answers to nearest whole dollar.) 2023

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

Income Tax Planning

Authors: Thomas P. Langdon, E. Vance Grange, Michael A. Dalton

5th Edition

1936602075, 978-1936602070

More Books

Students also viewed these Accounting questions

Question

uml class generator

Answered: 1 week ago

Question

Describe some common hazards in the contemporary workplace

Answered: 1 week ago