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Analyzing Accounts Receivable Instructions Chart of Accounts General Journal Analysis X Instructions Upham Company’s June 30,...

Analyzing Accounts Receivable

Instructions

Chart of Accounts

General Journal

Analysis

X

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.

Solutions

Expert Solution

(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


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