Question

Journal Entries for Credit Losses At the beginning of the year, Whitney Company had the following accounts on its books:

Accounts Receivable	$154,000	Debit
Allowance for Doubtful Accounts	$7,900	Credit
During the year, credit sales were:	$1,133,000
and collections on account were:	$1,120,000

The following transactions, among others, occurred during the year:

Feb.17	Wrote off R. Lowell's account,	$3,300
May.28	Wrote off G. Boyd's account,	$2,100
Oct.13	Received $500 from G. Boyd, who is in bankruptcy proceedings,
	in final settlement of the account written off on May 28.
	This amount is not included in the $1,120,000 collections.
Dec.15	Wrote off K. Marshall's account,	$1,400
Dec.31	In an adjusting entry, recorded the allowance for doubtful accounts at	0.5%
	of credit sales for the year.

Required

a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.

a.

General Journal
Date	Description	Debit	Credit
Dec.31	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	$Answer	$Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To record sales revenue for the year.
Dec.31	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To record collections on account for the year.
Feb.17	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To write off R. Lowell's account.
May.28	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To write off G. Boyd's account.
Oct.13	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To reinstate G. Boyd's account for partial recovery.
Oct.13	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To record collection from G. Boyd.
Dec.15	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To write-off K. Marshall's account.
Dec.31	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	AnswerAccounts ReceivableAccounts Receivable - G. BoydAccounts Receivable - K. MarshallAccounts Receivable - R. LowellAllowance for Doubtful AccountsBad Debts ExpenseCashSales Revenue	Answer	Answer
	To record allowance for doubtful accounts.

b.

	AnswerAccounts ReceivableLess: Allowance for Doubtful Accounts	$Answer
	AnswerAccounts ReceivableLess: Allowance for Doubtful Accounts	Answer
		$Answer

Answer 1