Question
The following information relates to transactions for Pinocchio Ltd., which has an October 31, 2022, year end: Sales revenue during the year amount to $200,000.
The following information relates to transactions for Pinocchio Ltd., which has an October 31, 2022, year end:
Sales revenue during the year amount to $200,000. Of these sales, 75% were on credit and it was estimated that 2% of the credit sales made in the year would end up being uncollectible
Cash collections on accounts during the year amount to $148,500.
Opening balances for the year in the following accounts are stated below:
Accounts Receivable Allowance for Doubtful Accounts $50,000 debit balance
Bad Debt Expense $800 credit balance
in addition to the transactions stated above a $600 account was determined to be uncollectible and written off by Pinocchio.
a) Prepare all journal entries for the year ended October 31, 2022.
b) Determine the balances in the following accounts as at October 31, 2022:
A. Accounts Receivable
b. Allowance for Doubtful Accounts
C. Bad debt expense
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