A partial balance sheet of Rocky Mount Wholesale Florist is provided following. Rocky Mount Wholesale Florist Partial
Question:
Rocky Mount Wholesale Florist
Partial Balance Sheet
December 31, 2008
Accounts Receivable..................................................... $105,000
Allowance for Uncollectible Accounts.......................... (3,150)
Net Realizable Value................................................. $101,850
During 2009, $2,450,000 was charged to accounts receivable, and $2,175,000 was paid on the account by customers. Also during 2009, Rocky Mount Wholesale Florist wrote off the following uncollectible accounts:
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Required:
(a) Record the journal entries to write off the three uncollectible accounts.
(b) Prepare a T-account for the Allowance account and calculate the balance on December 31, 2009. How should that balance be interpreted?
(c) Prepare a T-account for Accounts Receivable and calculate the balance on December 31, 2009.
(d) Rocky Mount Wholesale Florist estimates that 4 percent of the accounts receivable balance will be uncollectible. What amount is estimated to be uncollectible at the end of 2009? What amount would be considered the net realizable value of the receivables?
(e) Rocky Mount Wholesale Florist wants to prepare an adjusting entry for uncollectible accounts that will make the net realizable value equal to the amount calculated in part (d). Prepare the journal entry to record the estimated uncollectible accounts. (Hint: The amount calculated as uncollectible will not be the amount used in the journal entry.)
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
a 318 Allowance for Uncollectible Accounts 1200 Accounts ReceivablePickADaisy 1200 622 All...View the full answer
