Following information relates to Finit Ltd. for the year ending December 31, 2015. Accounts receivable, January...

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Following information relates to Finit Ltd. for the year ending December 31, 2015. Accounts receivable, January 1, 2015 Allowance for doubtful accounts, January 1, 2015 $ 35,000 Dr 7,200 Cr Sales, all on account 420,000 380,000 3,100 Collection of accounts receivable Accounts receivable written off Required a. Prepare the journal entries to record the activity. 1. Dr. Bank deposits $35,000 Cr. Accounts receivable $35,000 2. Dr. Bad debt provision Cr. Accounts receivable $7,200 $7,200 3. Dr. Bank deposits $420,000 Cr. Accounts receivable $420,000 4. Dr. Bank deposits $380,000 Cr. Accounts receivable $380,000 5. Dr. Cash $3,100 Cr. Accounts receivable $3,100 b. Assuming the company provides for bad debts using 5% of accounts receivable, prepare the journal entry to record bad debt expense for the year ending December 31, 2015. $35,000x0.05=$1,750 c. Which concept is followed when the allowance method is required to account for bad debts? matching concept Following information relates to Finit Ltd. for the year ending December 31, 2015. Accounts receivable, January 1, 2015 Allowance for doubtful accounts, January 1, 2015 $ 35,000 Dr 7,200 Cr Sales, all on account 420,000 380,000 3,100 Collection of accounts receivable Accounts receivable written off Required a. Prepare the journal entries to record the activity. 1. Dr. Bank deposits $35,000 Cr. Accounts receivable $35,000 2. Dr. Bad debt provision Cr. Accounts receivable $7,200 $7,200 3. Dr. Bank deposits $420,000 Cr. Accounts receivable $420,000 4. Dr. Bank deposits $380,000 Cr. Accounts receivable $380,000 5. Dr. Cash $3,100 Cr. Accounts receivable $3,100 b. Assuming the company provides for bad debts using 5% of accounts receivable, prepare the journal entry to record bad debt expense for the year ending December 31, 2015. $35,000x0.05=$1,750 c. Which concept is followed when the allowance method is required to account for bad debts? matching concept

Answer rating: 100% (QA)

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