Question $29$

On April $30,$ Cray has $$375,800$ of accounts receivable. Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the

allowance for doubtful accounts of $$14,250.$

Prepare journal entries to record the following selected May transactions. The company uses the perpetual inventory system.

a$.$ Sold $$415,200$ of merchandise $($that cost $$249,000)$ to customers on credit.

b$.$ Received $$465,800$ cash in payment of accounts receivable.

c$.$ Wrote off $$15,800$ of uncollectible accounts receivable.

d$.$ In adjusting the accounts on May $31,$ its fiscal year$-$end, the company estimated that $4\%$ of accounts receivable will be uncollectible.

Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May $31$ balance sheet.