Question: Ortiz Automotive ended December 2012 with Accounts Receivable of 20 000

Ortiz Automotive ended December 2012 with Accounts Receivable of $20,000 and Allowance for Doubtful Accounts of $5,900. During January 2013, Ortiz Automotive completed the following transactions:
• Sales of $260,000, which included $160,000 in credit sales and $100,000 of cash sales.
• Cash collections on account, $54,000.
• Write-offs of uncollectible receivables, $2,500.
• Bad debt expense estimated as 4% of credit sales.
Requirements
1. Prepare journal entries to record sales, collections, write-offs of un-collectibles, and Bad Debt Expense by the percentage-of-sales method.
2. Calculate the ending balances in Accounts Receivable, Allowance for Doubtful Accounts, and net Accounts Receivable at January 31. How much does Ortiz Automotive expect to collect?



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  • CreatedJuly 08, 2015
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