In: Accounting
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.
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 |