Accounts Receivable Problem: For each of the following amounts, record the appro

Question

Accounts Receivable Problem: For each of the following amounts, record the appropriate journal entry. Assume all accounts start with a zero balance and provide T-Accounts at the end of the Second Year for Accounts Receivable, Sales Revenue, Allowance for Uncollectible Accounts, and Uncollectible Accounts Expense. First Year: Total Credit Sales: Increase to the Uncollectible Allowance: Write offs & Payments: 800,000 12,500 , write off 2. Cash Receipt: 3. Write off: 4. Cash Receipt: 5. Cash from Account Previously Written o 3,200 485,000 7,000 300,000 1,500 Closing Entries: 1. Sales Revenu 2. Uncollectible Accounts Expense Second Year: Total Credit Sales: Increase to the Uncollectible Allowance: 950,000 15,000

Explanation / Answer

First year Ref Account Title Debit Credit Sales Accounts Receivable 800000 Sales 800000 Bad debt Bad Debt 12500 Allowance for uncollectible accounts 12500 1 Allowance for uncollectible accounts 3200 Accounts Receivable 3200 2 Cash 485000 Accounts Receivable 485000 3 Allowance for uncollectible accounts 7000 Accounts Receivable 7000 4 Cash 300000 Accounts Receivable 300000 5 Cash 1500 Allowance for uncollectible accounts 1500 Closing Entries Ref Account Title Debit Credit 1 Sales Revenue 800000 Income Summary 800000 2 Income Summary 12500 Uncollectible expense 12500 Accounts Receivable Sales Debit Credit Debit Credit 800000 3200 800000 800000 485000 7000 300000 Uncollectible Accounts Expense 800000 795200 Debit Credit End.Bal. 4800 12500 12500 Allowance for Uncollectible Accounts Debit Credit 3200 12500 7000 1500 10200 14000 3800 Endb.Bal. Second Year Ref Account Title Debit Credit Sales Accounts Receivable 950000 Sales Revenue 950000 Bad debt Uncollectible expense 15000 Allowance for uncollectible accounts 15000 Accounts Receivable Sales Debit Credit Debit Credit Beg.Bal. 4800 950000 Sales 950000 Uncollectible Accounts Expense Allowance for Uncollectible Accounts Debit Credit Debit Credit 15000 3800 Beg.Bal. 15000

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