The following information is available for Quality Book Sales’ sales on account and accounts receivable: Accounts...

The following information is available for Quality Book Sales’ sales on account and accounts receivable: Accounts receivable balance, January 1, 2016 $ 79,500 Allowance for doubtful accounts, January 1, 2016 4,910 Sales on account, 2016 560,000 Collection on accounts receivable, 2016 566,000 After several collection attempts, Quality Book Sales wrote off $2,960 of accounts that could not be collected. Quality Book Sales estimates that 5 percent of the ending accounts receivable balance will be uncollectible. Required: a. Compute the following amounts: (1) Using the allowance method, the amount of uncollectible accounts expense for 2016. (2) Net realizable value of receivables at the end of 2016. b. Record the general journal entries to: (1) Record sales on account for 2016. (2) Record cash collections from accounts receivable for 2016. (3) Write off the accounts that are not collectible. (4) Record the estimated uncollectible accounts expense for 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Solutions

Expert Solution

Balance in Accounts receivable:
Beginning Accounts receivable	79500
Add: Sales	560000
Less: Collections	566000
Less: Amount written off	2960
Ending Accounts receivable	70540
Esimated Bad debts @5%
Required ending Balance in Allowance	3527

Balance in Allowance account:
Beginning Balance in Allowance	4910
Less: Written off amount	-2960
Existing balance in Allowance	1950
Required balance in Allowance	3527
Bad debts expense	1577

Uncollectible expense amount	1577

Net realizable value of Accounts receivable:
Accounts receivable(Gross)	70540
Less: Allowance for Uncollectible account	3527
Accounts receivable(Net)	67013


Req b:
Journal entries:
Accounts title and explanations		Debit $	Credit $
Accounts receivable Dr.		560,000
Sales revenue			560,000

Cash Account Dr.		566000
Accounts receiavble			566000

Allowance fro uncollectible Accounts Dr.		2960
Accounts receivable			2960

Bad debts expense Account Dr.		1577
Allowance for uncollectible accounts			1577

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The following information is available for Quality Book Sales' sales on account and accounts receivable: Accounts...

The following information is available for Quality Book Sales' sales on account and accounts receivable: Accounts receivable balance, January 1, Year 2 $ 125,900 Allowance for doubtful accounts, January 1, Year 2 3,520 Sales on account, Year 2 812,740 Collection on accounts receivable, Year 2 844,776 After several collection attempts, Quality Book Sales's wrote off $2,520 of accounts that could not be collected. Quality Book Sales estimates that 1.25 percent of sales on account will be uncollectible. Required a. Compute...

30-Sep The following information is available: Sales Revenue (net credit sales) 1,200 Accounts Receivable &nb

30-Sep The following information is available: Sales Revenue (net credit sales) 1,200 Accounts Receivable 800 Allowance for Doubtful Accounts 15 (credit balance) Prepare the journal entry assuming that bad debts are expected to be 6% of accounts receivable. GENERAL JOURNAL DATE ACCOUNT TITLE DEBIT CREDIT Garcia Company has accounts receivable of $ 2,500 Prepare the journal entries for the following transactions: 1-Sep Added 1% finance charges to $600 company credit card balances for not paying within 30...

(ACCOUNTS RECEIVABLE) The following data about Zeta Company’s accounts related with credit sales are available for...

(ACCOUNTS RECEIVABLE) The following data about Zeta Company’s accounts related with credit sales are available for 2019. “Net Sales” during 2019 (all on credit) 750,000 TL “Accounts Receivables”, on 1.1.2019 45,000 TL “Allowance For Uncollectible Accounts”, on 1.1.2019 10,000 TL (Credit) Collection of accounts receivables during 2019 580,000 TL Customer accounts written off as uncollectible during 2019 2,000 TL *Assuming that Zeta Company provides for doubtful accounts based on %4 of the credit sales. Required: a) Make the relating adjusting...

The following information is available for the McCain Manufacturing Company for 2020. Accounts receivable, January 1,...

The following information is available for the McCain Manufacturing Company for 2020. Accounts receivable, January 1, 2020 $120,000 Accounts payable, January 1, 2020 ? Raw materials, January 1, 2020 10,000 Work in process, January 1, 2020 25,000 Finished goods, January 1, 2020 75,000 Accounts receivable, December 31, 2020 80,000 Accounts payable, December 31, 2020 200,000 Raw materials, December 31, 2020 ? Work in process, December 31, 2020 60,000 Finished goods, December 31, 2020 50,000 Raw materials used in production 100,000...

The following information relates to a company’s accounts receivable: accounts receivable balance at the beginning of...

The following information relates to a company’s accounts receivable: accounts receivable balance at the beginning of the year, $410,000; allowance for uncollectible accounts at the beginning of the year, $30,000 (credit balance); credit sales during the year, $1,500,000; accounts receivable written off during the year, $21,000; cash collections from customers, $1,400,000. Assuming the company estimates that future bad debts will equal 8% of the year-end balance in accounts receivable. 1. Calculate the year-end balance in the allowance for uncollectible accounts....

Mayfield Company has the following information available: Accounts payable $108,000 Intangible assets $180,000 Accounts receivable 90,000...

Mayfield Company has the following information available: Accounts payable $108,000 Intangible assets $180,000 Accounts receivable 90,000 Inventory 210,000 Accumulated depreciation 150,000 Mortgage payable 330,000 Cash 60,000 Retained earnings ? Common stock 192,000 Salaries payable 42,000 Equipment 420,000 Supplies 30,000 Compute each of the following, showing calculations for partial credit. 1. Total current assets 2. Total noncurrent (long-term) assets 3. Total current liabilities 4. Retained earnings amount 5. Current ratio 6. Debt to total assets ratio

The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning...

The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $420,000; allowance for uncollectible accounts at the beginning of the year, $31,000 (credit balance); credit sales during the year, $1,550,000; accounts receivable written off during the year, $22,000; cash collections from customers, $1,600,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales. 1. Calculate bad debt expense for the year. 2. Calculate the year-end balance in the...

The following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning...

The following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning of the year, $300,000; allowance for uncollectible accounts at the beginning of the year, $25,000 (credit balance); credit sales during the year, $1,500,000; accounts receivable written off during the year, $16,000; cash collections from customers, $1,450,000. Assuming the company estimates that future bad debts will equal 10% of the year-end balance in accounts receivable. 1. Calculate bad debt expense for the year. ( Please...

Using the following information based on expected sales to forecast the monthly cash collections, accounts receivable...

Using the following information based on expected sales to forecast the monthly cash collections, accounts receivable balance, monthly cash disbursements, net cash flows, and cash surplus / deficit at the end of each month in the third quarter of 2018 (July - September 2018). Do not allow your firm to have a cash balance below the minimum cash balance and only borrow what you need. a. In June 2018 credit sales were $50,000. b. The firm’s total sales in 2017...

When checking the sales and account receivable accounts, the auditor would like to confirm the objectives...

When checking the sales and account receivable accounts, the auditor would like to confirm the objectives below: ITEMS AUDIT OBJECTIVES I Sales transactions that are recorded actually occurred II The balance presented on account receivables aged trial balance (ATB) for each customer exists on the balance sheet date Required: For each of the objectives listed above: (a) state the name of management assertion from which the audit objective is derived. (b) advise the auditor of one (1) substantive test they...

Subjects