On June 1 the MARINO Company had a $78,000 debit balance in Accounts Receivable

Question

On June 1 the MARINO Company had a $78,000 debit balance in Accounts Receivable and a $6,800 credit balance in the allowance for uncollectible accounts (also know as allowance for bad debt). During June the company had total sales of $298,000. Of this amount $260,000 was on account. In addition, during June the company collected $90,000 on accounts receivable and wrote off as uncollectible a customers account in the amount of $6,200. The company uses the allowance method by estimating 3% of credit sales as bad debt. Beginning with the appropriate T-accounts show the entries necessary to record the sales revenue, the collection of receivables, the estimate of bad debt expense for the period and the write-off of the uncollectible account. When you have finished making the entries find the balance in each account and show which numbers will be closed to the income statement and which ones will be found on the balance sheet.

Explanation / Answer

Answers 1.35670 2.1998

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