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The following information is available for a company as of January 1 st , 2015:

ID: 2416672 • Letter: T

Question

The following information is available for a company as of January 1st, 2015:

Accounts Receivable

$185,000

Allowance for Doubtful Accounts

(62,500)

       Accounts Receivable (net)

122,500

The following events took place during 2015:

During the year, the company had credit sales of $256,700.

The company wrote off accounts worth $28,900 as uncollectible.

The company estimated bad debts as 3.5% of credit sales.

The company collected $286,000 of cash from accounts receivable.

A.1) Record the four events above that took place during 2015 in journal entry form

B.2) Determine the Accounts Receivable (net) amount as of December 31, 2015. Show your work.

Accounts Receivable

$185,000

Allowance for Doubtful Accounts

(62,500)

       Accounts Receivable (net)

122,500

Explanation / Answer

1- accounts receivables debit              256700

    credit sales                                                       256700

2- allowances for doubtful debt debit           28900

     credit accounts recivables                                      28900

3- bad and doubtful debts             debit               8985

    credit allowances for bad and doubtful debts                     8985

4- cash debit                                       286000

      credit bill recivables          286000

B-2 net balance of accounts receivables = 122500

      credit sales                                         = 256700

Balance in accounts receivables account= 122500+256700 = 379200

cash collected = 286000

balance in accounts receivables = 379200 - 286000 = 93200

balance in allowances for bad debts = 62500

allowance for the year = 8% of credit sales = 8985

total balance in allowance for bad debts = 62500 - 8985 = 42585

balance in bills receivables account = 93200 - 42585 = 50615