On December 31, 20X1, the company reported a debit balance of $100,000 in accounts receivable and a credit balance of $1,500 in the allowance for doubtful accounts. December 31 is the company’s reporting date. During 20X2, the company had the following transactions: The company made a credit sale of $400,000. The company wrote off the uncollectible accounts for $14,000. The company collected the receivable of $6,000 that had been written off previously. Prepare journal entries to record the above three transactions. Assume that 1% of the company’s accounts receivable cannot be collected, prepare journal entry to record bad debt expense at the end of 20X2.
On December 31, 20X1, the company reported a debit balance of $100,000 in accounts receivable and a credit balance of $1,500 in the allowance for doubtful accounts. December 31 is the company’s reporting date. During 20X2, the company had the following transactions: The company made a credit sale of $400,000. The company wrote off the uncollectible accounts for $14,000. The company collected the receivable of $6,000 that had been written off previously. Prepare journal entries to record the above three transactions. Assume that 1% of the company’s accounts receivable cannot be collected, prepare journal entry to record bad debt expense at the end of 20X2.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
- On December 31, 20X1, the company reported a debit balance of $100,000 in
accounts receivable and a credit balance of $1,500 in the allowance for doubtful accounts. December 31 is the company’s reporting date. During 20X2, the company had the following transactions: - The company made a credit sale of $400,000.
- The company wrote off the uncollectible accounts for $14,000.
- The company collected the receivable of $6,000 that had been written off previously.
- Prepare journal entries to record the above three transactions.
- Assume that 1% of the company’s accounts receivable cannot be collected, prepare
journal entry to recordbad debt expense at the end of 20X2.
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