Can I please get detailed answer for this. I am trying to understand the process
ID: 2486652 • Letter: C
Question
Can I please get detailed answer for this. I am trying to understand the process to get to the answer.
18 Accounts receivable entries LO1,2,3 the 00 and During the 2015-16 financial year CE Electronics entered into the following transactions Sales on account Collections of credit sales Write off accounts deemed uncollectible Received payments on accounts previously written off $1 400000 1225000 20000 7 500 was of On its 30 June 2016 statement of financial position, CE reported gross accounts receivable of $707000 and an allowance account of $43000 Required Prepare all journal entries to record each of the transactions that occurred in 2015-16 and the journal entry to record bad debt expense at 30 June 2016, assuming that 7 per cent of accounts receivable at 30 June are unExplanation / Answer
Answer:
Journal Entries;
1. Sales on Account
Dr. Sundry Debtors $ 1,400,000
Cr. Sales $ 1,400,000
2. Collections of Credit Sales
Dr. Cash or Bank $ 1,225,000
Cr. Sundry Debtors $ 1,225,000
3. Write off accounts deemed uncollectible
Dr. Bad Debts $ 20,000
Cr. Sundry Debtors $ 20,000
4. Receipts on accounts previously written off
Dr. Cash or Bank $ 7,500
Cr. Bad Debts $ 7,500
On 30.06.2016
5. Bad Debt allowance as on 30.06.2016 is $ 43,000 and expected bad debts = 7% of $ 707,000 = $ 49,490; therefore increase in bad debts allowance is $ 49,490 - $ 43,000 = $ 6,490
Dr. Bad Debt Allowance $ 6,490
Cr. Sundry Debtors $ 6,490
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.