Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Accounts Receivable Dec. 31/19 Balance 420,000 allowance for Doubtful Accounts 19,200 Dec. 31/19 Balance During 2020, the following selected transactions occurred: a. Sales totalled $2,810,000, of which 25% were cash sales (cost of sales $1,813,000). b. Sales returns were $115,000, half regarding credit sales. The returned merchandise was scrapped. C. An account for $31,000 was recovered. d. Several accounts were written off: $33,000. e. Collections from credit customers totalled $1770,000 (excluding the recovery in (c) above). Part A Required: 1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivable and Allowance for Doubtful Accounts. Required: 1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivable and Allowance for Doubtful Accounts. View transaction list View journal entry worksheet Transaction No 1 General Journal Credit a(1) Cash Accounts receivable Sales Dobit 702,500 2,107,500 2,810,000 N a(2) Cost of goods sold Merchandise inventory 1,813,000 1,813,000 3 b 115,000 Sales returns and allowances Accounts receivable Cash 57,500 57,500 4 c(1) 31,000 Accounts receivable Allowance for doubtful accounts 31,000 31,000 5 c(2) Cash Accounts receivable 31,000 33,000 6 d Allowance for doubtful accounts Accounts receivable 33,000 1.770,000 7 Cash Accounts receivable 1,770,000 Part B Required: 2. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 1% of net credit sales. View transaction list View Journal entry worksheet No Date General Journal Debit Credit 1 December 31 20,500 Bad debt expense Allowance for doubtful accounts 20,500 3. Show how accounts receivable will appear on the December 31, 2020, balance sheet. Partial Balance Sheet Assets Current assets: 667,000 Accounts receivable Less: Allowance for doubtful accounts 37,700 $ 629,300 4. What will bad debt expense be on the income statement for the year ended December 31, 2020? Bad debt expenso $ 20,500 Part C (independent of Part B) Required: 5. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 3- of outstanding receivables. View transaction list View journal entry worksheet > No Date General Journal 1 Dec 31 Debit Credit Bad debt expense Allowance for doubtful accounts 4,410 4,410 6. Show how accounts receivable will appear on the December 31, 2020, balance sheet. Partial Balance Sheet Assets Current assets: $ Accounts receivable Less: Allowance for doubtful accounts 667,000 37,210 $ 629,790 7. What will bad debt expense be on the income statement for the year ended December 31, 2020? debt expenso $ 20,010
