The following transactions were completed by The Irvine Company during the curre
ID: 2487455 • Letter: T
Question
The following transactions were completed by The Irvine Company during the current fiscal year ended December 31:
Feb. 8 Received 45% of the $18,700 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible. May 27 Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,270 cash in full payment of Seth’s account. Aug. 13 Wrote off the $6,360 balance owed by Kat Tracks Co., which has no assets. Oct. 31 Reinstated the account of Crawford Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,975 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,265; Bonneville Co., $5,595; Crow Distributors, $9,305; Fiber Optics, $1,150. Dec. 31 Based on an analysis of the $1,759,500 of accounts receivable, it was estimated that $35,190 will be uncollectible. Journalized the adjusting entry.Explanation / Answer
1) 8-Feb Cash Dr 8415 Accounts receivable Cr 8415 Allowance for uncollectibles Dr 10285 Accounts receivable Cr 10285 ( to write off the balance) 27-May Accounts receivable Dr 7270 Allowance for uncollectibles Cr 7270 Cash Dr 7270 Accounts receivable Cr 7270 13-Aug Allowance for uncollectibles Dr 6360 Accounts receivable Cr 6360 ( to write off the balance) 31-Oct Accounts receivable Dr 3975 Allowance for uncollectibles Cr 3975 Cash Dr 3975 Accounts receivable Cr 3975 31-Dec Allowance for uncollectibles Dr 23315 Accounts receivable Cr 23315 ( to write off the balance) 31-Dec Bad Debts expense Dr 35190 Allowance for uncollectibles Cr 35190 2a&b) Allowance for uncollectibles accounts 8-Feb To Accounts receivable 10285 1-Jan By balance b/d 25685 13-Aug To Accounts receivable 6360 27-May By Accounts receivable 7270 31-Dec To Accounts receivable 23315 31-Oct By Accounts receivable 3975 31-Dec To balance b/d 32160 31-Dec By Bad debt expense 35190 72120 72120 Bad Debt expense 31-Dec To Allowance for uncollectibles 35190 31-Dec By Balance c/d 35190 Accounts Receivable 1-Jan To balance b/d 1759500 8-Feb By Cash 8415 27-May To allowance for uncollectibles 7270 8-Feb By Allowance for uncollectibles accounts 10285 31-Oct To allowance for uncollectibles 3975 27-May By Cash 7270 13-Aug By Allowance for uncollectibles accounts 6360 31-Oct By Cash 3975 31-Dec By Allowance for uncollectibles accounts 23315 31-Dec By Balance c/d 1711125 1770745 1770745 3) Net balance of account receivable 1711125 4) A) Net sales 17710000 allowance ( 1/4 of 1%) 44275 Bad Debt expense 44275 B) Allowance for uncollectibles accounts 8-Feb To Accounts receivable 10285 1-Jan By balance b/d 25685 13-Aug To Accounts receivable 6360 27-May By Accounts receivable 7270 31-Dec To Accounts receivable 23315 31-Oct By Accounts receivable 3975 31-Dec To balance b/d 41245 31-Dec By Bad debt expense 44275 81205 81205 Balance in allowance account 41245 C) Accounts Receivable 1-Jan To balance b/d 1759500 8-Feb By Cash 8415 27-May To allowance for uncollectibles 7270 8-Feb By Allowance for uncollectibles accounts 10285 31-Oct To allowance for uncollectibles 3975 27-May By Cash 7270 13-Aug By Allowance for uncollectibles accounts 6360 31-Oct By Cash 3975 31-Dec By Allowance for uncollectibles accounts 23315 31-Dec By Balance c/d 1711125 1770745 1770745 Net realizable value of accounts receivable 1711125
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