Teck Automotive ended December 2011 with Accounts Receivable of $30,000 and a credit balance in Allowance for Uncollectible Accounts of $4,000. During January 2012, Teck Automotive completed the following transactions:
a. Sales of $158,000, which included $98,000 in credit sales and $60,000 of cash sales. Ignore cost of goods sold.
b. Cash collections on account, $77,000.
c. Write-offs of uncollectible receivables, $900.
d. Bad debt expense, estimated as 1% of credit sales.

1. Prepare journal entries to record sales (ignore cost of goods sold), collections, write-offs of uncollectibles, and bad debt expense by the percent-of-sales method.
2. Calculate the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and net Accounts Receivable at January 31, 2012. How much does Teck Automotive expect to collect?

  • CreatedApril 29, 2014
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