On June 31, Rabbit and Company had a $25,000 balance in Accounts Receivable and a $1,800...

On June 31, Rabbit and Company had a $25,000 balance in Accounts Receivable and a $1,800 credit balance in Allowance for Uncollectible Accounts. During November, the company made credit sales of $175,000. November collections on account were $135,000, and write-offs of uncollectible receivables totaled $2,600. The required allowance at period end is calculated to be $4,200.

Required:

Record the journal entries required by Rabbit and Company during November. Explanations are not required.

Expert Solution

Date	Account titles and explanation				Debit	Credit
Nov.	Accounts receivable				175000
	Sales revenue					175000
	(Credit sales made)
Nov.	Cash				135000
	Accounts receivable					135000
	(Collection from customers)
Nov.	Allowance for uncollectible accounts				2600
	Accounts receivable					2600
	(Accounts receivable written-off)
Nov.	Uncollectible accounts expense			(Note:1)	5000
	Allowance for uncollectible accounts					5000
	(Allowance made)

Note:1
Unadjusted balance in allowance for uncollectible accounts:
			$
Beginning balance		(Credit)	1800
Less: Written-off			2600
Unadjusted balance		(Debit)	-800

Required allowance at period end=$ 4200
Hence, uncollectible accounts expense for the year=800+4200=$ 5000

ekkarill92 answered 1 year ago

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