Question
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31,
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the companys fiscal year-end. The 2015 balance sheet disclosed the following: |
Current assets: | |||||
Receivables, net of allowance for uncollectible accounts of $32,000 $442,000 | |||||
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During 2016, credit sales were $1,760,000, cash collections from customers $1,840,000, and $37,000 in accounts receivable were written off. In addition, $3,200 was collected from a customer whose account was written off in 2015. An aging of accounts receivable at December 31, 2016, reveals the following: |
1. | Prepare summary journal entries to account for the 2016 write-offs and the collection of the receivable previously written off.
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