In: Accounting
Prepare journal entries to record the following transactions that occurred for this company in its second year of operations. • Year 2 sales on account: $5,700,000. • Year 2 collections of accounts receivable: $5,900,000. • Year 2 write-offs: $44,000 • Year 2 reinstatements and subsequent collections of reinstated accounts: $29,000 • 12/31/Y2: Year-end adjustment to record estimated uncollectible accounts at 4% of credit sales.
Directions: Prepare all journal entries, post to accounts, and show the year-end balance sheet presentation of accounts receivable. Calculate the NRV after each transaction listed above.
The journal entries for the given transactions are as follows:
The Balances in the balance sheet for Accounts Receivable and Allowance for Doubtful Accounts will be as follows:
Since the opening balances are not given it is not possible to identify the exact balances of the stated accounts.