Problem 8-4A Accounts receivable transactions and bad debt adjustments LO1, 2,3 Belevu Supples showed the folowing selected adjusted balances at its December 31, 2016, year-end Accounts Recevable Dec 31/16 Balance 530,000 Allowance for Doubdul Accounts 14 800 Dec 31/16 Balance During the year 2017, the following selected transactions occurred a. Sales totaled $2.950,000, of which 25% were cash sales (cost of sales $1,903,000). b. Sales returns were $104,000, half regarding credit sales. The returned merchandse was scrapped c. An account for $20,000 was recovered d. Several accounts were writen off, $22,000. e. Colections from credit customers totaled $1,860,000 (excluding the recovery in (c) above) Part A Required: 1. Joumalize transactions (a) through (e). You may find t useful to post your entries to T-accounts for Accounts Receivable and Alowance for Doubtul Accounts. Assume Perpetual inventory system is used. (If no entry required" in the first account field.) View journal entry worksheet View transaction l Required: 1. Joumaize transactons (a) tmrougn (e You may find t usetul so post your entnes to T-accounes tor Accounts Recevable and Aowance for Doubmu Accounes. Assume Perpetual inventory system is used (if no entry is requir required in the first account fiel View journal entry worksheet View transaction list No Transaction General Journal Debit Credit Cash 737.500 a(t) Accounts recelvable 2212 500 250000 Sles Cost of goods sold Merchandse inventorys 2 al2) 1903.000 1 903 000 Sales ratums and allowances 104 000 h Accounts receivable 104.000 Cesh ol1) 20.000 Alowance for doubtul accounts 20000 Allowance for dubtful accounts e2) 22.000 Accounts receivable 22000 Allowance for doubtful accounts d 22.000 22.000 Accounts payabl 1060.00 Cash Accounts payable 1860.000 Part B Required: 2. Prepare the December 31, 2017, adjusting entry to estimate bad debts assuming that uncollectiblee accounts are estimated to be 1% of net credit sales. (If no entry is required for a View transaction list Journal entry worksheet Record the estimate for uncollectible accounts. Note: Enter debits before credits. Date General Journal Debit Credit December Bad debt expense 31 Record entry Clear entry View general journal 3. Show how accounts receivable will appear on the December 31, 2017, balance sheet. Partial Balance Sheet Assets Current assets Accounts receivable 4. What will bad debt expense be on the income statement for the year ended December 31, 2017? Bad debt expense Part C (independent of Part B) Required: 5. Prepare the December 31, 2017, adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 3% of outstanding receivables. (If no entry is re View transaction list Journal entry worksheet
