At the end of 2017 fiscal year, L&Z Co. has the following information:

Balance Sheets

Current Assets

Accounts receivable, net of allowance of $1,076                                 $16,194
  

a)   During 2018, the company wrote off $200 of specific accounts that were deemed uncollectable.   Prepare the journal entry to record the write-off of these accounts receivable. (4 pts)

b) At the end of 2018 (12/31/2018), management estimate 8% of account receivables balance will likely be difficult to collect. The company’s Accounts Receivable has a gross ending balance of $17,600 . Prepare the journal entry to record bad debt expense for 2018 using the percentage of receivables method (the balance sheet approach).

                                    

c)   If credit sales for 2018 were $118,000, compute the amount of cash collected from customers in 2018 (note: take into account the event in part a).

d)         On Oct 1^st , 2018, the company sold coal to Beta Electric, receiving a 6-month, noninterest-bearing note for $100,000. The effective interest rate on the note is 8%. The company has a fiscal year-end of 12/31.

1. Prepare the journal entry to record the sale.

ii. Prepare adjusting journal entries regarding the note receivable on 12/31/2018.

Answer rating: 100% (QA)

SOLUTION Here are the journal entries for each part a Writeoff of specific accounts Debit Allowance ... View the full answer