Check my work Raintree Cosmetic Company sells its products to customers on a cre

Question

Check my work Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2017 balance sheet disclosed the following Current assets Receivables, net of allowance for uncolectible accounta of $30,000 $432,000 During 2018, credit sales were $1.750,000, cash collections from customers $1,830,000, and $35,000 in accounts recelvable were written off. In addition, $3,000 was collected from a customer whose account was written off in 2017. An aging of accounts receivable at December 31, 2018, reveals the following: Percentage of Year-EndPercent Age Group 0-60 day 61-90 daya 91-120 days Over 120 days 65% 20 10 15 25 40 Required: 1. Prepare summary journal entries to account for the 2018 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts according to each of the following situations: Bad debt expense is estimated to be 3% of credit sales for the year. estimated to be 10% of the year-end balance in accounts receivable. determined by an aging of accounts receivable. b. Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is c. Bed debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is

Explanation / Answer

1.

2.

Working:

2b.

2c.

Date General Journal Debit Credit Dec. 31, 2018 Allowance for uncollectible accounts 35000 Accounts receivable 35000 (To record write-off of uncollectible accounts) Dec. 31, 2018 Accounts receivable 3000 Allowance for uncollectible accounts 3000 (To reinstate accounts previously written-off) Dec. 31, 2018 Cash 3000 Accounts receivable 3000 (To record collection on accounts previously written-off)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

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