Question

2. The Krissy Company had the following Account Balances and transactions during the current year: Accounts Receivable $175,000, Sales: $750,000, Sales Returns and Allowances: $20,000. Krissy Company estimates bad debt expenses as 2.5% of net sales.

       Jan. 1       Journalized estimated bad debt allowance for the year.

       Mar. 3      Received a $5,200, 180-day, 8% note from C. Davis in payment of

                        account.

                       

            24      Wrote off the $500 account for V. Lake, a customer, against the

                        Allowance for Un-collectable Accounts.

       Apr. 17     C. Davis paid note in full.

               13 V. Lake paid account that had been written off on March 24.

     

REQUIRED: Record the above transactions in general journal form.

Answer 1

Jan 1, Bad debt Allowance A/c ..................Dr Rs. 18750

To Accounts Receivable Cr Rs. 18750

(Being bad debts allowed)

Mar.3.Debit note Receivable A/c..............Dr Rs 5200

To Accounts Receivable Cr Rs.5200

(Being Note received from C. Davis)

Apl.17. Cash/bank A/c ........................Dr. Rs 5405.15

To Debit Note Receivable A/c Rs. 5200

To Interest income Rs. 205.15

(Being amount received against note received from C. davis @8% interest for 180 days.)

Mar. 24.Allowance for Unaccountable A/cs .....Dr Rs.500

To Accounts Receivable A/c Cr Rs.500

(being bad debts written off)

Apl 13. A) Accounts Receivable A/c .....................Dr. Rs 500

To allowance for Unaccountable A/cs Cr Rs 500

(being entry for bad debts written off reversed)

B) Cash/ Bank A/c ........................Dr Rs. 500

To Accounts Receivable A/c Cr Rs.500

(being bad debts recovered)