Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Dec. 31/19...

       

Transcribed Image Text:

Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Dec. 31/19 Balance Accounts Receivable 390,000 Allowance for Doubtful Accounts 20,400 Dec. 31/19 Balance During 2020, the following selected transactions occurred: a. Sales totalled $2,780,000, of which 25% were cash sales (cost of sales $1,795,000). b. Sales returns were $118,000, half regarding credit sales. The returned merchandise was scrapped. c. An account for $34,000 was recovered. d. Several accounts were written off: $36,000. e. Collections from credit customers totalled $1,740,000 (excluding the recovery in (c) above). Part A Required: 1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivable and Allowance for Doubtful Accounts. Part B Required: 2. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 1% of net credit sales. View transaction list Journal entry worksheet 1 Record the estimate for uncollectible accounts. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal 3. Show how accounts receivable will appear on the December 31, 2020, balance sheet. Partial Balance Sheet Assets Current assets: 4. What will bad debt expense be on the income statement for the year ended December 31, 2020? Bad debt expense Part C (independent of Part B) Required: 5. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 3% of outstanding receivables. View transaction list Journal entry worksheet 1 Record the estimate for uncollectible accounts. Note: Enter debits before credits. Date Dec 31 General Journal Debit Credit Record entry Clear entry View general journal 6. Show how accounts receivable will appear on the December 31, 2020, balance sheet. Partial Balance Sheet Assets Current assets: 7. What will bad debt expense be on the income statement for the year ended December 31, 2020? Bad debt expense Swiss Supplies showed the following selected adjusted balances at its December 31, 2019, year-end: Dec. 31/19 Balance Accounts Receivable 390,000 Allowance for Doubtful Accounts 20,400 Dec. 31/19 Balance During 2020, the following selected transactions occurred: a. Sales totalled $2,780,000, of which 25% were cash sales (cost of sales $1,795,000). b. Sales returns were $118,000, half regarding credit sales. The returned merchandise was scrapped. c. An account for $34,000 was recovered. d. Several accounts were written off: $36,000. e. Collections from credit customers totalled $1,740,000 (excluding the recovery in (c) above). Part A Required: 1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivable and Allowance for Doubtful Accounts. Part B Required: 2. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 1% of net credit sales. View transaction list Journal entry worksheet 1 Record the estimate for uncollectible accounts. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal 3. Show how accounts receivable will appear on the December 31, 2020, balance sheet. Partial Balance Sheet Assets Current assets: 4. What will bad debt expense be on the income statement for the year ended December 31, 2020? Bad debt expense Part C (independent of Part B) Required: 5. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are estimated to be 3% of outstanding receivables. View transaction list Journal entry worksheet 1 Record the estimate for uncollectible accounts. Note: Enter debits before credits. Date Dec 31 General Journal Debit Credit Record entry Clear entry View general journal 6. Show how accounts receivable will appear on the December 31, 2020, balance sheet. Partial Balance Sheet Assets Current assets: 7. What will bad debt expense be on the income statement for the year ended December 31, 2020? Bad debt expense