Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Question 3: 22 marks) Johnson Co. began operations on January 1, 2016. During the next 2 years, they completed a number of transactions involving credit
Question 3: 22 marks) Johnson Co. began operations on January 1, 2016. During the next 2 years, they completed a number of transactions involving credit sales, accounts receivable collections and bad debts. The transactions are summarized as follows (assume a perpetual inventory system): 2016 January 26 Merchandise that cost $608,000 was sold for $776,000 under credit terms of n/30. June 13 Wrote off uncollectible accounts receivable in the amount of $16,000 December 19 Received cash of $520,000 in payment of outstanding accounts receivable. December 31 In adjusting the accounts on December 31, concluded that 2.0% of the outstanding accounts receivable would become uncollectible. 2017 March 26 Johnson Co. sold merchandise for $1,144,000 under credit terms of n/60. The merchandise had cost $896,000. August 15 Wrote off uncollectible accounts receivable in the amount of $24,000 Paynents of outstanding accounts received totaled $560,000. November 22 December 31 While accounts were being adjusted on December 31, it was concluded that 2.0% of the outstanding accounts receivable would become uncollectible. Required: Prepare journal entries to record Johnson's 2016 and 2017 summarized transactions, and the adjusting entries to record bad debt expense at the end of each year (December 31)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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