At December 31, 2013, Weiss Imports reported this information on its balance sheet. Accounts receivable $600,000 Less:

Question:

At December 31, 2013, Weiss Imports reported this information on its balance sheet.

Accounts receivable $600,000

Less: Allowance for doubtful accounts 37,000

During 2014, the company had the following transactions related to receivables.

1. Sales on account $2,500,000

2. Sales returns and allowances 50,000

3. Collections of accounts receivable 2,200,000

4. Write-offs of accounts receivable deemed uncollectible 41,000

5. Recovery of bad debts previously written off as uncollectible 15,000


Instructions

(a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Omit cost of goods sold entries.)

(b) Enter the January 1, 2014, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances.

(c) Prepare the journal entry to record bad debt expense for 2014, assuming that aging the accounts receivable indicates that estimated bad debts are $46,000.

(d) Compute the accounts receivable turnover and average collection period.


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 Tools for Business Decision Making

ISBN: 978-1118128169

5th edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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