Problem 8-1A At December 31, 2018, Pina Colada Corp. reported the following information on its balance...

Problem 8-1A

At December 31, 2018, Pina Colada Corp. reported the following information on its balance sheet.

Accounts receivable		$952,000
Less: Allowance for doubtful accounts		84,000

During 2019, the company had the following transactions related to receivables.

1.	Sales on account	$3,869,880
2.	Sales returns and allowances	51,000
3.	Collections of accounts receivable	2,831,000
4.	Write-offs of accounts receivable deemed uncollectible	87,000
5.	Recovery of bad debts previously written off as uncollectible	28,000

a. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

b. Enter the January 1, 2019, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances. (Post entries in the order of journal entries presented in the previous part.)

c. Prepare the journal entry to record bad debt expense for 2019, assuming that an aging of accounts receivable indicates that expected bad debts are $272,880. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

d. Compute the accounts receivable turnover for 2019, assuming the expected bad debt information provided in (c). (Round answer to 2 decimal places, e.g. 25.25.)

Expert Solution

ekkarill92 answered 1 year ago

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