Question
The following transactions were completed by Daws Company during the current fiscal year ended December 31: Jan. 29 Received 40% of the $18,500 balance owed
The following transactions were completed by Daws Company during the current fiscal year ended December 31:
Jan. 29 | Received 40% of the $18,500 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. |
Apr. 18 | Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,430 cash in full payment of Clarks account. |
Aug. 9 | Wrote off the $6,470 balance owed by Iron Horse Co., which has no assets. |
Nov. 7 | Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,870 cash in full payment of the account. |
Dec. 31 | Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,245; DeVine Co., $5,595; Moser Distributors, $9,500; Oceanic Optics, $1,060. |
Dec. 31 | Based on an analysis of the $1,769,500 of accounts receivable, it was estimated that $35,390 will be uncollectible. Journalized the adjusting entry. |
2. A. Journalize the transactions. For the December 31 adjusting entry, assume the $1,769,500 balance in accounts receivable reflects the adjustments made during the year. Refer to the chart of accounts for a listing of the account titles the company uses.
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JOURNAL
ACCOUNTING EQUATION
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Required: | |||||||
1. | Record the January 1 credit balance of $25,330 in a T account for Allowance for Doubtful Accounts. | ||||||
2. |
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3. | Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). | ||||||
4. | Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables the adjusting entry on December 31 had been based on an estimated expense of of 1% of the sales of $18,430,000 for the year, determine the following:
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