In: Accounting
Analyzing Accounts Receivable
Instructions
Chart of Accounts
General Journal
Analysis
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Instructions
Upham Company’s June 30, 2016, balance sheet included the following information:
Upham Company |
Partial Balance Sheet |
June 30, 2016 |
1 |
Accounts Receivable |
$229,000.00 |
|
2 |
Less: Allowance for Doubtful Accounts |
(14,300.00) |
$214,700.00 |
3 |
Notes Receivable |
21,600.00 |
|
4 |
Total Receivables |
$236,300.00 |
|
5 |
* The company has a recourse liability of $2,000 for notes receivable sold with recourse. |
During the company’s fiscal year ending June 30, 2017, the following transactions occurred:
1. | Sales on credit | $870,000 |
2. | Collections of accounts receivable | 840,200 |
3. | Accounts receivable written off as uncollectible | 13,500 |
4. | Customer notes received in payment of accounts receivable | 72,000 |
5. | Notes receivable collected | 30,000 |
6. | Notes receivable, previously sold with recourse, were paid at maturity. The associated recourse liability for this note is $900. | 35,500 |
7. | Notes receivable were defaulted | 2,125 |
8. | Collections on accounts previously written off | 500 |
9. | Bad debts were estimated to be 1.5% of credit sales |
Required: | |
1. | Prepare the journal entries necessary for Upham to record the preceding transactions. |
2. | Prepare an analysis and schedule that shows the amounts of the accounts receivable, allowance for doubtful accounts, notes receivable, and notes receivable dishonored accounts that will be disclosed on Upham’s June 30, 2017, balance sheet. |
(1).
S.No. |
Accounts Title & Explanation |
Debit |
Credit |
(1). |
Account receivable |
$870000 |
|
Sales revenue |
$870000 |
||
(For recording sales on account) |
|||
(2) |
Cash |
$840200 |
|
Accounts receivable |
$840200 |
||
(For recording cash collected from account receivables) |
|||
(3) |
Allowance for Doubtful Accounts |
$13500 |
|
Accounts receivable |
$13500 |
||
(For recording uncollectible written off) |
|||
(4) |
Note receivable |
$72000 |
|
Accounts receivable |
$72000 |
||
(For recording notes receivable from account receivable) |
|||
(5) |
Cash |
$30000 |
|
Notes receivable |
$30000 |
||
(For recording cash from notes receivable) |
|||
(6) |
Recourse liability |
$35500 |
|
Loss on sale of receivables |
$35500 |
||
(For recording recourse liability) |
|||
(7) |
Notes receivable dishonored |
$2125 |
|
Cash |
$2125 |
||
(for recording notes receivable dishonored) |
|||
(8) |
Accounts receivable |
$500 |
|
Allowance for Doubtful Accounts |
$500 |
||
(For reinstatement of accounts receivable) |
|||
Cash |
$500 |
||
Accounts receivable |
$500 |
||
(For recording cash collected from previously written off) |
|||
(9) |
Bad debt expense |
$13050 |
|
Allowance for Doubtful Accounts |
$13050 |
||
(For recording estimated 1.5% bad debts) |
(2).
Accounts Receivable |
|||
6 / 30 / 16 bal. |
$229,000 |
Transaction 2 |
$840200 |
Transaction 1 |
$870000 |
Transaction 3 |
$13500 |
Transaction 8 (first entry) |
$500 |
Transaction 4 |
$72000 |
Transaction 8 (second entry) |
$500 |
||
6 / 30 / 17 bal. |
$173300 |
Allowance for Doubtful Accounts |
|||
Transaction 3 |
$13500 |
6 / 30 / 16 bal. |
$14300 |
Transaction 8 (First part) |
$500 |
||
Transaction 9 |
$13050 |
||
6 / 30 / 17 bal. |
$14350 |
Notes Receivable |
|||
6 / 30 / 16 bal. |
$21600 |
Transaction 5 |
$30000 |
Transaction 4 |
$72000 |
||
6 / 30 / 17 bal. |
$63600 |
Notes Receivable Dishonored |
|||
Transaction 7 |
$2125 |
||
6 / 30 / 17 bal. |
$2125 |