Requirements 1. Journalize sales, collections, write-offs of uncollectibles, and

ID: 2336465 • Letter: R

Question

Requirements 1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during December Explanations are not required. Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Net Accounts Receivable at December 31. How much does Candy expect to collect? Show how Candy Party Planners will report accounts receivable and net sales on its December 31 balance sheet and income statement for the month ended December 31 2. 3. PrintDone

Explanation / Answer

Solution:

From the given data we need to find the requirements 1, 2, and 3.

The calculations are shown below:

Requirement 1:

Accounts receivable dr

To sales revenue

199,000

Cash dr

To accounts receivable

158,000

Allowance for doubtful debts dr

To Accounts receivable

2,830

Bad debts expense dr

To allowance for doubtful debts

( 199,000 * 2%) = 3,980

3,980

Requirement 2:

Accounts recevable:

Beggining balance $39,000

a $199,000

Ending balance. $238,000

$158,000 b

$2,830 c

Allowance for uncollectable accounts:

$2,913 Beginning balance

$3,980 d

$6,893 Ending balance

Requirement 3:

Balance sheet :

Accounts receivable $ 80,000

Less: Allowance for doubtful debts $ 2,830

Net accounts receivable: $77,170

Income statement(partial):

Sales $199,000

Date Particulars Debit ($) Credit ($) a.