Question
On Jan 1 2020 ABC inc had the following accounts on its books Acc receivable $120,000...
On Jan 1 2020 ABC inc had the following accounts on its books
Acc receivable $120,000 (debit)
Allowance for uncollectible accounts $4,000 (credit)
During this year credit sales were $600,000 and collection on account were $580,000
A. Prepare general journal entries for the following transactions that occurred during the year:
1. Wrote off A companies account $3400
2. Wrote off B Inc account $1200
3. B inc which is in bankruptcy paid $400 in final settlement of the account written off in transaction 2. (this amount is not included in the $580,000 collections)
4. On dec 31 estimated the years bad debts expense at 1% of credit sales
B. Show how Accounts receivable and the allowance for uncollectible accounts would appear on the year end balance sheet
Homework Answers
Answer #1
Answer B: Allowance for uncollectible accounts would be deducted from Account receivable fro better representation in Balance sheet.
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