31. Account Receivable Entries LO1, 2, 3 The following financial information pertains to Sleepy Company: $...

Transcribed Image Text:

31. Account Receivable Entries LO1, 2, 3 The following financial information pertains to Sleepy Company: $ 275,000 Accounts receivable, 12/31/11 Allowance for bad debts, 12/31/11 Net credit sales, 2012 8,400 1,980,000 Collections on credit sales during 2012 Accounts receivable written off in 2012 1,730,000 6,500 Required a. Prepare all the necessary journal entries for 2012 sales, collections, and write-offs (using the direct write-off method). b. Using the allowance method, prepare 2012 jour- nal entries to record write-offs and to estimate bad debt expense assuming bad debt expense is estimated on a (i) percentage of net credit sales approach (2%) and (ii) percentage of accounts receivable approach (5%). c. What is the net realizable value of accounts receivable in parts b(i) and b(ii)? d. Explain the rationale for each of the approaches in part b. 31. Account Receivable Entries LO1, 2, 3 The following financial information pertains to Sleepy Company: $ 275,000 Accounts receivable, 12/31/11 Allowance for bad debts, 12/31/11 Net credit sales, 2012 8,400 1,980,000 Collections on credit sales during 2012 Accounts receivable written off in 2012 1,730,000 6,500 Required a. Prepare all the necessary journal entries for 2012 sales, collections, and write-offs (using the direct write-off method). b. Using the allowance method, prepare 2012 jour- nal entries to record write-offs and to estimate bad debt expense assuming bad debt expense is estimated on a (i) percentage of net credit sales approach (2%) and (ii) percentage of accounts receivable approach (5%). c. What is the net realizable value of accounts receivable in parts b(i) and b(ii)? d. Explain the rationale for each of the approaches in part b.

Answer rating: 100% (QA)

a Of all information given on the data the first information pertaining account receivable on 123111requires only an opening balance entry of Account Receivable ledger on 11220 This entry will have no ... View the full answer