Question

The balance sheet of InSpace, Inc., a world leader in the design and sale of telescopic equipment, reported the following information on its balance sheets for 2014 and 2013 (figures are in thousands):


In 2014, InSpace recorded $16,500 in sales (all on account), of which $900 was returned for credit. InSpace offers its customers credit terms of 2/10, n/30. Seventy-five percent of collections on accounts receivable were made within the discount period. InSpace wrote off uncollectible accounts receivable in the amount of $130 during 2014.

Requirements
1. Compute the amount of uncollectible accounts expense recorded by InSpace in 2014.
2. Compute InSpace’s cash collections from customers in 2014.
3. Open T-accounts for Accounts Receivable and Allowance for Uncollectible Accounts.
Enter the beginning balances into each of these accounts. Prepare summary journal entries in the T-accounts to record the following for 2014:
a. Sales
b. Collections
c. Sales returns
d. Write-offs of uncollectible accounts
e. Uncollectible-AccountsExpense


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  • CreatedJuly 25, 2014
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