On May 1, Cray has $555,800 of accounts receivable. Cray uses the allowance meth

Question

On May 1, Cray has $555,800 of accounts receivable. Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $13,900. a. Prepare journal entries to record the following selected May transactions. The company uses the perpetual inventory system. Use the date May 31 all of these transactions. 1). Sold $515,200 of merchandise (that cost $349,000) to customers on credit. 2). Received $525,800 cash in payment of accounts receivable. 3). Wrote off $15,800 of uncollectible accounts receivable. 4) In adjusting the accounts on May 31, its fiscal year-end, the company estimated that 4.50% of accounts receivable will be uncollectible. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet. (On back) coun

Explanation / Answer

Journal entries :

Balance sheet :

Date accounts & explanation debit credit Account receivable 515200 Sales revenue 515200 Cost of goods sold 349000 Merchandise inventory 349000 (To record credit sales and cost of goods sold) Cash 525800 Account receivable 525800 (To record cash received from customer) Allowance for doubtful accounts 15800 Account receivable 15800 (To record amount written off) Bad debt expense (529400*4.5%)+1900 25723 Allowance for doubtful accounts 25723 (To record adjusting entry)

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

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