value: 10.00 points The following information is available for Quality Book Sale
ID: 2527451 • Letter: V
Question
value: 10.00 points The following information is available for Quality Book Sales’ sales on account and accounts receivable: Accounts receivable balance, January 1, 2016 $ 79,500 Allowance for doubtful accounts, January 1, 2016 4,910 Sales on account, 2016 560,000 Collection on accounts receivable, 2016 566,000 After several collection attempts, Quality Book Sales wrote off $2,960 of accounts that could not be collected. Quality Book Sales estimates that 5 percent of the ending accounts receivable balance will be uncollectible. Required: a. Compute the following amounts: (1) Using the allowance method, the amount of uncollectible accounts expense for 2016. (2) Net realizable value of receivables at the end of 2016. b. Record the general journal entries to: (1) Record sales on account for 2016. (2) Record cash collections from accounts receivable for 2016. (3) Write off the accounts that are not collectible. (4) Record the estimated uncollectible accounts expense for 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) ReferenceseBook & Resources General JournalDifficulty: 2 MediumLearning Objective: 07-02 Use the percent of receivables method to account for uncollectible accounts expense. Check my work
Explanation / Answer
Answers
Accounts receivables
Allowances for doubtful account
Beginning Balance
$ 79,500.00
$ 4,910.00
(+) Sales on account
$ 5,60,000.00
(-) cash collection
$ 5,66,000.00
(-) Amount written off
$ 2,960.00
$ 2,960.00
Ending balance before adjustment
$ 70,540.00
$ 1,950.00
Accounts receivables
Ending balance before adjustment
$ 70,540.00
5% uncollectible
$ 3,527.00
balance before adjustment in Allowance account
$ 1,950.00
Uncollectible account expense to be recorded
$ 1,577.00
Allowances for doubtful account
Ending balance before adjustment
$ 1,950.00
(+) Uncollectible expense
$ 1,577.00
Total
$ 3,527.00
Accounts receivables
Ending balance before adjustment
$ 70,540.00
(-) Allowance for doubtful account adjusted balance
$ 3,527.00
Net realizable value of receivable
$ 67,013.00
Accounts titles
Debit
Credit
Accounts receivables
$ 5,60,000.00
sales revenue
$ 5,60,000.00
(sale on account)
Cash
$ 5,66,000.00
Accounts receivables
$ 5,66,000.00
(cash collected)
Allowances for doubtful account
$ 2,960.00
Accounts receivables
$ 2,960.00
(Amount written off)
Uncollectible expense account (bad Debt expense)
$ 1,577.00
Allowances for doubtful account
$ 1,577.00
(bad debt expense recorded)
Accounts receivables
Allowances for doubtful account
Beginning Balance
$ 79,500.00
$ 4,910.00
(+) Sales on account
$ 5,60,000.00
(-) cash collection
$ 5,66,000.00
(-) Amount written off
$ 2,960.00
$ 2,960.00
Ending balance before adjustment
$ 70,540.00
$ 1,950.00
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