PROBLEM VI (16%) Make the necessary entries for the following dates for Stern Co

Question

PROBLEM VI (16%) Make the necessary entries for the following dates for Stern Company. May 5, 2016 Wrote off the account of R. Quivers, a bankrupt, $910. Aug. 15, 2016 Received a check from J. Martling for $725 in full payment of his overdue account. The account was written off in 1999. Stern's sales in 2016 were $900,000. Stern's uncollectible accounts expense was based on 5% of sales. Dec. 31, 2016 The Allowance for Doubtful Accounts showed a debit balance of $2,000. It is estimated that $45,000 of receivables will be uncollectible based on an analysis. Dec. 31, 2016

Explanation / Answer

5-MAY-2016   ENTRY: BAD DEBTS ACCOUNT DEBIT                                            $910

                           TO R.QUIVERS ACCOUNT                                                                                                  $910

15AUG-2016      ENTRY : Cash & Bank Account DEBIT                                         $725

                             TO J.MARTLING ACCOUNT                                                                                            $725

31-DEC-2016   ENTRY : Accounts Receivable ac count DEBIT                          $45000

                                                To Allowance of Bad Debts                                                                         $45000

31-DEC-2016       ENTRY : ALLOWANCE FOR BAD DEBTS                                     $45000

                                                TO BAD DEBTS                                                                                                   $45000

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