firework sales of for the month total 195000. sales include 65000 for cash and 1

Question

firework sales of for the month total 195000. sales include 65000 for cash and 130000 on account. make journal entry.

Record the adjustment needed for the allowance for uncollectible accounts at 12/31. at the end of January, 3000$ of accounts receivable are past due, and the company expects that 50% of these accounts will not be collected. of the remaining accounts receivable, the company estimates that 2% will not be collected. no accounts were written off as uncollectible in january. make journal entry

Explanation / Answer

Answer:

Journal entry is:

By Bad debt expenses Dr $4,040

To Allowance for doubtful debt Cr $4,040

(being the allowance for doubtful debt made based on estimates)

Estimated Allowance for doubtful debt: In$ 1 50% of Accounts receivable of $3,000, that is past due 1500 ($3,000*50%) 2 2% of remaining accounts receivable ($130000-$3000)*2% 2540 (assuming no amount was collected from AR during the month and there was no opening accounts receivable) Total Estimate 4040

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