Smith Ltd. was in the process of preparing year-end adjusting entries for the year ended December 31,
Question:
Smith Ltd. was in the process of preparing year-end adjusting entries for the year ended December 31, 2018. Smith Ltd. had the following balance in their books (ledger):
Dr.
Cr.
Accounts Receivable $91,000
Allowance for Sales Discounts $4,500
Allowance for Sales Returns 3,300
Allowance for doubtful accounts 12,200
Additional Information:
o Total Credit Sales during 2018: $66,000
The Company estimated the following for the year-end December 31, 2018 purposes:
Expected Sales discounts $3,500
Expected Sales returns 4,100
Accounts receivable should be written off 4,400
Using percentage of credit sales method, the company estimated 10% of the credit sales might NOT be collected
Required:
Prepare the year-end entries for the above that are related to accounts receivable
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon