At January 1, 2015, Underwood Imports Inc. reported the following on its statement of financial position: Accounts

Question:

At January 1, 2015, Underwood Imports Inc. reported the following on its statement of financial position:

Accounts receivable .....................................$1,990,000

Allowance for doubtful accounts ...................... 124,000

During 2015, the company had the following summary transactions for receivables:

1. Sales on account, $5,200,000

2. Sales returns and allowances, $80,000

3. Collections of accounts receivable, $5,400,000

4. Interest added to overdue accounts, $400,000

5. Write off s of accounts receivable deemed uncollectible, $150,000

6. Collection of accounts previously written off as uncollectible, $60,000

7. After considering all of the above transactions, total estimated uncollectible accounts, $100,000

Instructions

(a) Prepare journal entries to record each of the above summary transactions.

(b) (1) Prepare T accounts for Accounts Receivable and Allowance for Doubtful Accounts, (2) enter the opening balances, (3) post the above summary entries, and (4) determine the ending balances.

(d) Show the statement of financial position presentation of the receivables as at December 31.

(e) Show the income statement presentation of the revenue and expense accounts for the year ended December 31.

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...