Question

Problem 7-19A Determination of account balances and preparation of journal entries-percent of receivables allowance method of accounting for uncollectible accounts LO 7-2

The following information is available for Quality Book Sales’ sales on account and accounts receivable:

Accounts receivable balance, January 1, Year 2	$	80,100
Allowance for doubtful accounts, January 1, Year 2		5,030
Sales on account, Year 2		566,000
Collection on accounts receivable, Year 2		572,000

After several collection attempts, Quality Book Sales wrote off $3,050 of accounts that could not be collected. Quality Book Sales estimates that 4 percent of the ending accounts receivable balance will be uncollectible.

Required
a. Compute the following amounts:

1. (1) Using the allowance method, the amount of uncollectible accounts expense for Year 2.
2. (2) Net realizable value of receivables at the end of Year 2.

amount of uncollectible accounts

net realizable value

b. Record the general journal entries to:

1. (1) Record sales on account for Year 2.
2. (2) Record cash collections from accounts receivable for Year 2.
3. (3) Write off the accounts that are not collectible.
4. (4) Record the estimated uncollectible accounts expense for Year 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
5. Record sales on account for Year 2.
6. Record cash collections from accounts receivable for Year 2.
7. record the entry for uncollectible accounts written off
8. Record the estimated uncollectible accounts expense for Year 2.

Answer 1