Accounts receivable transactions are provided below for J Looney Co. Dec. 31, 2014 The Company estimated that

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Accounts receivable transactions are provided below for J Looney Co.

Dec. 31, 2014 The Company estimated that 5% of its accounts receivable would become uncollectible. The balances in the accounts receivable account and allowance for doubtful accounts were $650,000 and $2,300 (debit), respectively.

Mar. 5, 2015 The Company determined that R. Black's $3,700 account and D. Wight's $6,900 account were uncollectible. The company's accounts receivable were $685,000 before the accounts were written off.

June 6, 2015 Wight paid his account that had been written off on March 5. The company's accounts receivable were $641,000 prior to recording the cash receipt for Wight.

Instructions

(a) Prepare the journal entries on December 31, 2014, March 5, 2015, and June 6, 2015.

(b) Post the journal entries to Allowance for Doubtful Accounts and calculate the new balance after each entry.

(c) Calculate the net realizable value of accounts receivable both before and after writing off the two accounts on March 5, 2015.

(d) Calculate the net realizable value of the accounts receivable both before and after recording the cash receipt from Wight on June 6, 2015.

Accounts Receivable
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...
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Related Book For  answer-question

Accounting Principles Part 2

ISBN: 978-1118306796

6th Canadian edition Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow

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