B. (25 pts.) Mercury Co. reported the following results for 2002: Operating Resu
ID: 2600322 • Letter: B
Question
B. (25 pts.) Mercury Co. reported the following results for 2002: Operating Results, 2002 Credit Sales Cost of Goods Sold Allow. for Uncoll. Acct's, Ending Bal. (credit) 428,000 284,000 4,200 Accounts Receivable, Ending Balance Amount Not yet due 1-30 days past due 30- 60 days past due Over 60 days past due 40,400 20,400 18,800 8,820 88,420 %Estimated Uncollectible 1.5% 3.0% 8.0% 40.0% te off S. Sandorson's accounts receivable of $4,820 on January 12, Mercury Co. wro 2003. After the account was written off, S. Sandorson paid Mercury thea $4,820 on January 28th mount due of Required: Prepare an aging of accounts receivable schedule to estimate the uncollectible accounts receivable at the end of 2002. 1. 2. Prepare the journal entries to record the following. a. Credit sales in 2002. b. Adjusting entry to record estimated uncollectible accounts receivable on December 31, 2002 from the aging schedule in (1). Write off of S. Sandorson's accounts receivable on January 12th. Collection on January 28th of S. Sandorson's previously written off account c.Explanation / Answer
1. Age Balance % estimated uncollectible Allowance
Not yet due 40400 1.5 606
1-30 days 20400 3 612
30-60 days 18800 8 1504
over 60 days 8820 40 3528
88420 $6250
b.
Date Accounts title Dr. Cr. a. Accounts receivable 428000 To sales revenue 428000 [Being credit sale recorded] b. 31 Dec,2002 Bad debts expenses [$6250 - 4200 (cr. balance)] 2050 To Allowance for uncollectible Accounts 2050 [Being bad debts expense recorded] c. 12 Jan,2003 Allowance for uncollectible Accounts 4820 To Accounts receivable 4820 [Being accounts receivable written off] d. 28 jan,2003 Accounts receivable 4820 To Allowance for uncollectible Accounts 4820 [Being reversal of previously recorded entry made] Cash 4820 To Accounts receivable 4820 [Being cash received]Related Questions
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