Reproduced below from Farthington Supply?s accounting records is the accounts receivable subledger along with selected general ledger accounts.

During the year 2020, there were no recoveries of accounts previously written off. Only one account, that of PDQ Servicing, was identified as being uncollectible on July 15, 2020. On January 4, 2020, Farthington issued a $7,000 credit memo to Lomas Industries regarding damaged goods returned.

Required

Analyzing the accounts, determine the following amounts:

a. The December 31, 2019, balance in Lomas Industries? account.

b. The January 7, 2020, collection from Lomas Industries.

c. The December 31, 2020, balance in the Accounts Receivable controlling account.

d. The November 15, 2020, transaction in JenStar Company?s account.

e. Collections during 2020.

f. Credit sales during 2020.

g. Adjusting entry on December 31, 2020, to estimate uncollectible accounts based on a rate of 2.5% of outstanding receivables.

h. The December 31, 2020, balance in the Allowance for Doubtful Accounts.

i. Show how accounts receivable should appear on the balance sheet on December 31, 2020.

Analysis Component: Why does Farthington maintain an accounts receivable subledger? What other subledgers might the company be using and why?

Transcribed Image Text:

General Ledger Accounts Receivable Allowance for Doubtful Accounts 200 Dec. 31/19 Dec. 31/19 Balance 158,500 Balance 7,000 Jan. 4/20 July 15/20 14,000 Credit sales ???? Collections in in 2020 ???? 2020 ???? 14,000 July 15/20 Dec. 31/20 ???? Dec. 31/20 Dec. 31/20 Balance ???? Balance Accounts Receivable Subledger JenStar Company Indigo Developments Dec. 31/19 Dec. 31/19 Balance 48,000 Balance -0- 48,000 Jan. 20/20 Mar. 1/20 17,000 17,000 Mar. 20/20 ???? Nov. 28/20 39,000 Nov. 15/20 Dec. 2/20 4,000 Dec. 31/20 Dec. 31/20 43,000 Balance 104,000 Balance PDQ Servicing Lomas Industries Dec. 31/19 Dec. 31/19 Balance 14,000 Balance ?? 7,000 Jan. 4/20 ???? Jan. 7/20 Apг. 21/20 52,000 52,000 May 5/20 14,000 July 15/20 Dec. 7/20 21,000 Dec. 31/20 Dec. 31/20 Balance 21,000 Balance -0-