Question

You have just been hired as the accountant for Fan-Tastic Sports Gear Inc., a wholesaler of sporting goods and apparel. The previous accountant left abruptly in late December, 20Y7, and an accounting intern has been drafting the journal entries since January. You are examining the accounting records before finalizing the journal entries for the first quarter of 20Y8. The following journal shows some of the accounts receivable transactions that you are reviewing.

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	Jan. 17	Sales		9,600.00				↓
2		Bad Debt Expense			9,600.00			↑
3	17	Bad Debt Expense		9,600.00				↓
4		Accounts Receivable-CJ’s Sports Corp.			9,600.00	↓
5	21	Cash		10,700.00		↑
6		Bad Debt Expense		2,200.00				↓
7		Accounts Receivable-Four Seasons Sportswear Co.			12,900.00	↓
8	Feb. 15	Accounts Receivable-Healthy Running Inc.		3,000.00		↑
9		Bad Debt Expense		500.00				↓
10		Sales			3,500.00			↑
11	Mar. 4	Accounts Receivable-Four Seasons Sportswear Co.		2,200.00		↑
12		Bad Debt Expense			2,200.00			↑
13	4	Cash		2,200.00		↑
14		Bad Debt Expense			2,200.00			↑
15	13	Cash		5,540.00		↑
16		Accounts Receivable-Barb’s Best Gear			5,540.00	↓
17	31	Bad Debt Expense		20,970.00				↓
18		Accounts Receivable-Healthy Running Inc.			5,150.00	↓
19		Accounts Receivable-The Locker Room			4,100.00	↓
20		Accounts Receivable-CJ’s Sports Corp.			2,780.00	↓
21		Accounts Receivable-Get Your Gear Inc.			7,050.00	↓
22		Accounts Receivable-Ready-2-Go			1,890.00	↓

Finalize the journal entries shown on the Fan-Tastic Sports Gear Inc. panel and make any necessary changes. Refer to the Chart of Accounts for the exact wording of account titles. You may also use any items from the preceding list shown in (1) if needed

(1)

Allowance for Doubtful Accounts

Total Credit Sales

Net Realizable Value of Receivables

Balance of Aging Accounts

Estimate for Uncollectible Accounts

Answer 1

The entries made by the accoountant are more or less correct as per the accounting rules. The final set of entries are as follows: