The following transactions were completed by Daws Company during the current fis
ID: 2571229 • Letter: T
Question
The following transactions were completed by Daws Company during the current fiscal year ended December 31:
The amount of a receivable that is expected to be collected or realized.
A claim against the customer created by selling merchandise or services on credit.
All money claims against other entities, including people, business firms, and other organizations.
The operating expense incurred because of the failure to collect receivables.
Expected net realizable value of the accounts receivable as of December 31.
The contra asset account for accounts receivable.
The operating expense incurred because of the failure to collect receivables.
Nov. 7
Jan. 1
Jan. 29
Nov. 7
Jan. 1
Aug. 9
Jan. 29
Apr. 27
Apr. 18
Dec. 31
May 27
Apr. 21
Dec. 31
Nov. 7
Apr. 27
Feb. 17
Dec. 31 Adjusting Entry
Dec. 31 Unadjusted Balance
Dec. 31 Unadjusted Balance
Dec. 31 Adjusting Entry
Nov. 20
Dec. 31 Adjusting Entry
July 6
Jan. 29 Received 40% of the $18,500 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. Apr. 18 Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,430 cash in full payment of Clark’s account. Aug. 9 Wrote off the $6,470 balance owed by Iron Horse Co., which has no assets. Nov. 7 Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,870 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,245; DeVine Co., $5,595; Moser Distributors, $9,500; Oceanic Optics, $1,060. Dec. 31 Based on an analysis of the $1,769,500 of accounts receivable, it was estimated that $35,390 will be uncollectible. Journalized the adjusting entry.Explanation / Answer
Part 1 and 2 DATE DESCRIPTION POST. REF. DEBIT CREDIT Jan.29 Cash 110 $7,400 Allowance for Doubtful Accounts 129 $11,100 Accounts Receivable-Kovar Co. 121 $18,500 Apr.18 Accounts Receivable-Spencer Clark 122 $7,430 Allowance for Doubtful Accounts 129 $7,430 Cash 110 $7,430 Accounts Receivable-Spencer Clark 122 $7,430 Aug. 9 Allowance for Doubtful Accounts 129 $6,470 Accounts Receivable- Iron Horse Co 123 $6,470 Nov.7 Accounts Receivable- Vinyl Co 124 $3,870 Allowance for Doubtful Accounts 129 $3,870 Cash 110 $3,870 Accounts Receivable- Vinyl Co 124 $3,870 Dec. 31 Allowance for Doubtful Accounts 129 $23,400 Accounts Receivable-Beth Connelly Inc 125 $7,245 Accounts Receivable-DeVine Co 126 $5,595 Accounts Receivable-Moser Distributors 127 $9,500 Accounts Receivable-Oceanic Optics 128 $1,060 Dec. 31 Bad Debt Expense 538 $35,390 Allowance for Doubtful Accounts 129 $35,390 Allowance for Doubtful Accounts Jan.29 $11,100 Jan. 1 Balance $25,330 Aug. 9 $6,470 Apr.18 $7,430 Dec. 31 $23,400 Nov.7 $3,870 Dec. 31 Unadjusted Balance $4,340 Dec. 31 Adjusting Entry $35,390 Dec. 31 Adj. Balance $39,730 Bad Debt Expense Dec. 31 Adjusting Entry $35,390 A) Bad debt expense for the year. $35,390 B) Balance in the allowance account after the adjustment of December 31. $39,730 3)Expected net realizable value of the accounts receivable as of December 31. Net Realisable Value = $1,769,500 - $35,390 $1,734,110
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