Question

In: Accounting

On January 1, Griffin Company had the following (normal) account balances: Accounts Receivable: $69,400 Allowance for...

On January 1, Griffin Company had the following (normal) account balances:

Accounts Receivable: $69,400

Allowance for Bad Debts: 1,270

The bookkeeper, Barbara Jackson, has prepared the following information for the year to assist you in creating a balance sheet.

Credit Sales for the Year: $230,400

Collections of Accounts Receivable: 228,040

Write-off of Bad Debts: 160

Bad Debts Expense for Year: 350

(recorded as an adjusting entry on December 31)

Expert Solution

A. Journal Entries Required

1. For Credit Sales of the Year:-

Accounts Receivable $230,400 Dr.

Sales Account $230,400 Cr.

2. For Collections of Accounts Receivable:

Cash / Bank Account $228,040 Dr.

Accounts Receivable $228,040 Cr.

3. For Write-off of Bad Debts:

Allowance for Bad Debts $160 Dr.

Accounts Receivable $160 Cr.

(Note: It is assumed that this is the write off from the provision / allowance for bad debts created in the previous year)

4. Bad Debts Expense for Year:

Bad Debts Account $350 Dr.

Accounts Receivable $350 Cr.

(Note: It is assumed that this is direct write off bad debts without creating any provision / allowance for bad debts)

B. If you need to pass a single Journal Entry for the all the above transactions:

Accounts Receivable $1,850 Dr.

Cash / Bank Account $228,040 Dr.

Allowance for Bad Debts $160 Dr.

Bad Debts Account $350 Dr.

Sales Account $230,400 Cr.

C. Extract of Balance Sheet as of Dec 31

Asset Side: Accounts Receivable $71,250

Liabilities Side OR Minus to Assets Side: Allowance for Bad Debts $1,110

ekkarill92 answered 2 years ago

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