At September 30, 2011, Eagle Mountain Flagpoles had Accounts receivable of $33,0

Question

At September 30, 2011, Eagle Mountain Flagpoles had Accounts receivable of $33,000 and Allowance for uncollectible accounts had a credit balance of $4,000. During October 2011, Eagle Mountain Flagpoles recorded the following: Requirements R1. Journalize sales, collections, uncollectible-account expense using the allowance method (percent-of-sales method), and write-offs of uncollectibles during October 2011. R2. Prepare T-accounts to show the ending balances in Accounts receivable and Allowance for uncollectible accounts. Compute net accounts receivable at October 31. How much does Eagle Mountain expect to collect? R3. Show how Eagle Mountain Flagpoles will report Accounts receivable on its October 31, 2011, balance sheet. a. sales of $186,00(161,000 on account; $25,000 for cash) b. collections on account, 127,000. c. uncollectiable-account expense, estimated as 2% of credit sales. d. Write offs of collectible receivables, $2,200

Explanation / Answer

Req 1:
a)
Acc receivable (db) $161,000
Cash(db) $25,000
Sales Revenue (cr) $186,000

b)
Cash (db) $127,000
Acc Rec (cr) $127,000

c)

Allowance for bad debt (db) $2200
Acc Receivable (cr) $2,200

Req 2:

Account receivable Balance

=(33000+161000-127000-2200)
=$64,800

Allowance for bad debt balance
=4000-2200
=$1800(credit balance)

Req 3:
Bad debt expense is 2% credit sales = (2%*161000)=$3,220

Bad debt expense (db) $3200
Allownace for bad debt (cr) 3200

Allowance for debt ending balance = $5000(credit)

Net account receivable= 64800-5000=$59,800

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

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