Question: The accounts of Quickly Company pro vided the following 20X4 information

The accounts of Quickly Company pro-vided the following 20X4 information at 31 December:
Accounts receivable balance......... $ 600,000 (dr.)
Allowance for sales discounts........ 5,500 (cr.)
Allowance for sales returns ......... 2,000 (cr.)
Allowance for doubtful accounts ....... 40,000 (cr.)
In fact, the allowance for sales discounts is not needed at the end of 20X5, the allowance for sales returns should be $ 14,000, and aging shows that the allowance for doubtful accounts should be $ 65,000.

1. Prepare journal entries to adjust all allowances.
2. By how much have these entries changed earnings?
3. What is the net balance of accounts receivable that will be included on the SFP?

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  • CreatedFebruary 17, 2015
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