At January 1, 2024, Hilltop Flagpoles had Accounts Receivable of $28,000, and Allowance for Bad Debts had
Question:
At January 1, 2024, Hilltop Flagpoles had Accounts Receivable of $28,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilltop Flagpoles recorded the following transactions for January:
a. Sales of $185,000 ($164,000 on account; $21,000 for cash). Ignore Cost of Goods Sold.
b. Collections on account, $135,000.
c. Write-offs of uncollectible receivables, $2,300.
Requirements
1. Journalize Hilltop’s transactions that occurred during January. The company uses the allowance method.
2. Post Hilltop’s transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts.
3. Journalize Hilltop’s adjustment to record bad debts expense assuming Hilltop estimates bad debts as 3% of credit sales on January 31, 2024. Post the adjustment to the appropriate T-accounts.
4. Show how Hilltop Flagpoles will report net accounts receivable on its January 31, 2024, balance sheet.
Step by Step Answer:
Horngrens Accounting The Financial Chapters
ISBN: 9780136162186
13th Edition
Authors: Tracie Miller Nobles, Brenda Mattison