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In: Accounting

Splish Brothers Trading uses a perpetual inventory system and the earnings approach to recognize revenue. The...

Splish Brothers Trading uses a perpetual inventory system and the earnings approach to recognize revenue. The company offers credit terms to select customer. The following are transactions of Splish Brothers Trading with some of its customers.

Feb. 5 Sold merchandise to Classen for $46,000, terms 1/10, n/60.
6 Classen returned $5,200 of merchandise.
11 Wrote off an account receivable from B. Wong of $1,600, after making repeated efforts to collect.
15 Classen paid Splish Brothers the amount owing.
28 Collected $890 from a collection agency who managed to collect an account from Mancini that had been previously written off by Splish Brothers.


Prepare the journal entries to record the above transactions. Ignore any inventory or cost of goods sold entries for the purposes of this question.

Solutions

Expert Solution

Date Account Titles Debit Credit
Feb-05 Accounts Receivable-Classen $         46,000
     Sales Revenue $         46,000
Feb-06 Sales Returns and Allowances $           5,200
     Accounts Receivable-Classen $           5,200
Feb-11 Allowance for Doubtful Accounts $           1,600
     Accounts Receivable-B.Wong $           1,600
Feb-15 Cash $         40,392
Sales Discount $              408
     Accounts Receivable-Classen $         40,800
Feb-28 Accounts Receivable-Mancini $              890
     Allowance for Doubtful Accounts $               890
Feb-28 Cash $              890
     Accounts Receivable-Mancini $               890

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