Recording Revenue, Receivables, and Bad Debt Expense On January 1, 2019, Import Properties Inc. reported the following balances on its statement of financial position: Accounts receivable $2,105,000 Allowance for doubtful accounts 195,000 During 2019, the company conducted the following transactions: Sold goods on account for $6,000,000 Processed sales returns of $50,000 Processed sales allowances of $40,000 Collected $6,950,000 of accounts receivable Added interest to overdue accounts receivable of $150,000 Wrote off accounts receivable considered uncollectible of $75,000 Recovered accounts receivable previously written off of $45,000 Required: 1. Prepare the journal entries to record the above transactions. (Record sales) (Record sales returns) (Record sales allowances) (Record collections) (Record interest income) (Record write-off of accounts receivable) (Record accounts previously written off) 2. Record the journal entry for bad debt expense at December 31, assuming that the allowance for doubtful accounts at December 31 should be $225,000. Dec. 31 (Record bad debts expense) 3. Post all of the above entries to T-accounts for accounts receivable, allowance for doubtful accounts, and other accounts you deem are required. Accounts Receivable Write-offs Beg. Balance Returns Sales Allowances Interest Collections Recoveries Collections Balance Allowance for Doubtful Accounts Write-offs Beg. Balance Recoveries Bad Debts Balance Cash Collections Recoveries Balance Sales Sales Sales Returns Returns Sales Allowances Allowances Interest Income Interest Bad Debts Bad Debts

Recording Revenue, Receivables, and Bad Debt Expense On January 1, 2019, Import Properties Inc. reported the following balances on its statement of financial position: Accounts receivable $2,105,000 Allowance for doubtful accounts 195,000 During 2019, the company conducted the following transactions: Sold goods on account for $6,000,000 Processed sales returns of $50,000 Processed sales allowances of $40,000 Collected $6,950,000 of accounts receivable Added interest to overdue accounts receivable of $150,000 Wrote off accounts receivable considered uncollectible of $75,000 Recovered accounts receivable previously written off of $45,000 Required: 1. Prepare the journal entries to record the above transactions. (Record sales) (Record sales returns) (Record sales allowances) (Record collections) (Record interest income) (Record write-off of accounts receivable) (Record accounts previously written off) 2. Record the journal entry for bad debt expense at December 31, assuming that the allowance for doubtful accounts at December 31 should be $225,000. Dec. 31 (Record bad debts expense) 3. Post all of the above entries to T-accounts for accounts receivable, allowance for doubtful accounts, and other accounts you deem are required. Accounts Receivable Write-offs Beg. Balance Returns Sales Allowances Interest Collections Recoveries Collections Balance Allowance for Doubtful Accounts Write-offs Beg. Balance Recoveries Bad Debts Balance Cash Collections Recoveries Balance Sales Sales Sales Returns Returns Sales Allowances Allowances Interest Income Interest Bad Debts Bad Debts

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 31E

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Recording Revenue, Receivables, and Bad Debt Expense

On January 1, 2019, Import Properties Inc. reported the following balances on its statement of financial position:

Accounts receivable	$2,105,000
Allowance for doubtful accounts	195,000

During 2019, the company conducted the following transactions:

Sold goods on account for $6,000,000
Processed sales returns of $50,000
Processed sales allowances of $40,000
Collected $6,950,000 of accounts receivable
Added interest to overdue accounts receivable of $150,000
Wrote off accounts receivable considered uncollectible of $75,000
Recovered accounts receivable previously written off of $45,000

Required:

1. Prepare the journal entries to record the above transactions.



	(Record sales)


	(Record sales returns)


	(Record sales allowances)


	(Record collections)


	(Record interest income)


	(Record write-off of accounts receivable)




	(Record accounts previously written off)

2. Record the journal entry for bad debt expense at December 31, assuming that the allowance for doubtful accounts at December 31 should be $225,000.

Dec. 31

	(Record bad debts expense)

3. Post all of the above entries to T-accounts for accounts receivable, allowance for doubtful accounts, and other accounts you deem are required.

Accounts Receivable
		Write-offs
Beg. Balance		Returns
Sales		Allowances
Interest		Collections
Recoveries		Collections
Balance

Allowance for Doubtful Accounts
Write-offs		Beg. Balance
		Recoveries
		Bad Debts
		Balance

Cash
Collections
Recoveries
Balance

Sales
		Sales

Sales Returns
Returns

Sales Allowances
Allowances

Interest Income
		Interest

Bad Debts
Bad Debts

4. Prepare the proper statement of financial position presentation of accounts receivable at December 31, 2019.

Import Properties Inc.
Partial Statement of Financial Position
December 31, 2019
	$

5. Prepare the proper statement of earnings presentation of the statement of earnings accounts for the year ended December 31.

Import Properties Inc.
Partial Income Statement
For The Year Ended December 31, 2019
	$
Expenses
	$
Other income and expenses
	$

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