In 2016, Grant Corporation recorded credit sales of $3,200,000 and bad debts expenses of $42,000. Write-offs of uncollectible amounts total $39,000, and one account, worth $12,000, that had been written off an earlier year was collected in 2016.Prepare journal entries to record each transition.General JournalRecord, sales revenue for this yearRecord bad debt expense for the yearWrite off uncollectible debt for this yearReverse prior write off debt now collectedRecord collection of the reinstated account.If the net account receivables increased by $220,000, how much cash was collected from credit customers during the year? Prepare a journal entry to record cash collection.

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Asked Nov 15, 2019
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In 2016, Grant Corporation recorded credit sales of $3,200,000 and bad debts expenses of $42,000. Write-offs of uncollectible amounts total $39,000, and one account, worth $12,000, that had been written off an earlier year was collected in 2016.
Prepare journal entries to record each transition.
General Journal
Record, sales revenue for this year
Record bad debt expense for the year
Write off uncollectible debt for this year
Reverse prior write off debt now collected
Record collection of the reinstated account.
If the net account receivables increased by $220,000, how much cash was collected from credit customers during the year? Prepare a journal entry to record cash collection.

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Expert Answer

Step 1

Hence, journal entries are passed for recording the sales revenue, bad debts expenses, write off of uncollectible accounts, reverse prior write off and collection on reinstated accounts.

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Journal entries Account title and explanation 1Account receivable S.No Debit Credit $3,200,000 $3,200,000 Sales (To record the sales revenue for the year) $42,000 2 Bad debts $42,000 Allowance for bad debts (To record bad debts expense for the year) $39,000 3 Allowance for bad debts $39,000 Accounts receivable To record write off uncollectible debts) 4 Accounts receivable S12,000 $12,000 Allowance for bad debts (To record reverse prior write off uncollectible debts) S12,000 5Bank Accounts receivable $12,000 To record collection on reinststed account)

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Step 2

Hence, $2,926,000 is the amount of cash collections. It is obtained by the subtrac...

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Particulars Sales Less: Bad debts expense Less: Increase in accounts receivable Less: Increase in allowance ($42,000+ $12,000- $39,000) ($15,000) Cash collections Amount S3,200,000| |($39,000) |($220,000) S2,926,000

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