On May 31, Cray has $375,800 of accounts receivable. Cray uses the allowance met

Question

On May 31, Cray has $375,800 of accounts receivable. Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250.

1> Prepare journal entries to record the following selected May transactions. The company uses the perpetual inventory system.
2> Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet.

a. Sold $415,200 of merchandise (that cost $249,000) to customers on credit.
b. Received $465,800 cash in payment of accounts receivable.
c. Wrote off $15,800 of uncollectible accounts receivable.
d. In adjusting the accounts on May 31, its fiscal year-end, the company estimated that 4.0% of accounts receivable will be uncollectible.

Explanation / Answer

*

2)Accounts receivable       375800

less:Allowance for bad debt   (15032)

Net receivable   360768

S no Accounts Debit credit a -1 Accounts receivable 415200 sales 415200 [being sales made on account ] cost of sales 249000 Merchandise inventory 249000 [being cost of sales recorded] b Cash 465800 Accounts receivable 465800 [being collection from customers made] c Allowance for bad debts 15800 Accounts receivable 15800 [being receivable write off ] d Bad debt expense 782 Allowance for Bad debt   [375800*.04] - 14250 782 [being receivable estimated to be uncollectible]

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.