At the beginning of the current period, Griffey Corp. had balances in Accounts R
ID: 2710843 • Letter: A
Question
At the beginning of the current period, Griffey Corp. had balances in Accounts Receivable of $238,000 and in Allowance for Doubtful Accounts of $9,000 (credit). During the period, it had net credit sales of $839,000 and collections of $782,000. It wrote off as uncollectible accounts receivable of $7,800. However, a $4,200 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $24,900 at the end of the period. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(To record sales)
(To reinstate account previously written off)
(e) Determine the ending balances in Accounts Receivable and Allowance for Doubtful Accounts.
(f) What is the net realizable value of the receivables at the end of the period?
Explanation / Answer
(a)
(i)
DR Accounts Receivable $839,000
Revenue $839,000
(To record sales on account)
(ii)
DR Cash $782,000
Accounts Receivable $782,000
(To record cash colleced from customers)
(b)
DR Allowance for uncollectible debt $7,800
Accounts Receivables $7,800
(To record write-off of doubtful debt)
(c)
DR Accounts Receivable $4,200
Allowance for uncollectible debt $4,200
(To record recovery of doubtful debt written-off earlier)
(d)
DR Bad debt expense $24,900
Accounts Receivable $24,900
(To record end-of period bad debt expense (estimated))
NOTE: First 4 parts of the question are answered.
P.S> This is an accounting question. Post your future accounting treatment/journal entry questions under Accounting & not in Finance.
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