The following selected transactions relate to ABC Company: March, 1 Sold 20,000 of merchandise to Potter...

 

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The following selected transactions relate to ABC Company: March, 1 Sold £20,000 of merchandise to Potter plc, terms 2/10, n/30. March, 10 Received payment in full from Potter plc for balance due. March, 13 Made Dylan plc credit card sales for £13,200. April, 11 Sold accounts receivable of £8,000 to Harcot Factor. Harcot Factor assesses a service charge of 2% of the amount of receivables sold. May, 10 Credit sales recorded during the first 6 months total £2,000,000. The bad debt percentage is 1% of credit sales. At May 31, the balance in the allowance account is credit £3,500 before adjustment. June, 20 Wrote off as uncollectible £16,000 of accounts receivable. Dylan uses the percentage-of-sales basis to estimate bad debts. Instructions Prepare the journal entries for the above transactions. The following selected transactions relate to ABC Company: March, 1 Sold £20,000 of merchandise to Potter plc, terms 2/10, n/30. March, 10 Received payment in full from Potter plc for balance due. March, 13 Made Dylan plc credit card sales for £13,200. April, 11 Sold accounts receivable of £8,000 to Harcot Factor. Harcot Factor assesses a service charge of 2% of the amount of receivables sold. May, 10 Credit sales recorded during the first 6 months total £2,000,000. The bad debt percentage is 1% of credit sales. At May 31, the balance in the allowance account is credit £3,500 before adjustment. June, 20 Wrote off as uncollectible £16,000 of accounts receivable. Dylan uses the percentage-of-sales basis to estimate bad debts. Instructions Prepare the journal entries for the above transactions.

Answer rating: 100% (QA)

Date Particulars Debit Credit March 1 Accounts Receivable 20000 Sales Revenue 2... View the full answer