Sheffield Hagen, a former disc golf star, operates Sheffield’s Discorama. At the beginning of the current season on April 1, the ledger of Sheffield’s Discorama showed Cash $1,900, Inventory $2,300, and Owner’s Capital $4,200. The following transactions were completed during April. Apr. 5 Purchased golf discs, bags, and other inventory on account from Mumford Co. $1,100, FOB shipping point, terms 2/10, n/60. 7 Paid freight on the Mumford Co. purchase $40. 9 Received credit from Mumford Co. for merchandise returned $200. 12 Purchased disc golf shirts and other accessories on account from Saucer Sportswear $560, terms 1/10, n/30. 14 Paid Mumford Co. in full, less discount. 17 Received credit from Saucer Sportswear for merchandise returned $60. 21 Paid Saucer Sportswear in full, less discount. Journalize the April transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
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.
Sheffield Hagen, a former disc golf star, operates Sheffield’s Discorama. At the beginning of the current season on April 1, the ledger of Sheffield’s Discorama showed Cash $1,900, Inventory $2,300, and Owner’s Capital $4,200. The following transactions were completed during April.
| Apr. 5 | Purchased golf discs, bags, and other inventory on account from Mumford Co. $1,100, FOB shipping point, terms 2/10, n/60. | |
| 7 | Paid freight on the Mumford Co. purchase $40. | |
| 9 | Received credit from Mumford Co. for merchandise returned $200. | |
| 12 | Purchased disc golf shirts and other accessories on account from Saucer Sportswear $560, terms 1/10, n/30. | |
| 14 | Paid Mumford Co. in full, less discount. | |
| 17 | Received credit from Saucer Sportswear for merchandise returned $60. | |
| 21 | Paid Saucer Sportswear in full, less discount. |
Journalize the April transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record
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Date
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Account Titles and Explanation
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Debit
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Credit
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