Monday
March 30, 2015

Homework Help: accounting - please try to help

Posted by John on Friday, October 13, 2006 at 11:59pm.

the trial balance of a Sporting House shows a $150,000 outstanding balance in A/R at the end of 2005. During 2006, 80% of the total credit sales of $3,500,000 was collected, and no receivables were written off as uncollectible. The company estimated that 2.0% of the credit sales would be uncollectible. During 2007, the account of Sybrowsky, who owed $4,200 was judged to be uncollectible and was written off. At the end of 2007, the amount previously written off was collected in full from mr. Sybrowsky.
**************************

PREPARE THE NECESSARY JOURNAL ENTRIES FOR RECORDING ALL THE PRECEEDING TRANSACTIONS RELATING TO UNCOLLECTIBLES ON THE BOOKS OF Sporting House.


$150,000 outstanding balance in A/R at the end of 2005
Beginning balance of A/R for 2006

During 2006, 80% of the total credit sales of $3,500,000 was collected
Therefore 20% of $3,500,000 was not collected

...estimated that 2.0% of the credit sales would be uncollectible
So 2% of $3,500,000 is estimated bad debt. I think the account name is allowance for bad debt or estimated bad debt, check your text to sure.

During 2007, the account of Sybrowsky, who owed $4,200 was judged to be uncollectible and was written off. At the end of 2007, the amount previously written off was collected in full from mr. Sybrowsky.
So a reversing entry of $4,200 need to be made. Dr to cash and Cr to bad debt, or make an entry to his A/R account and show it paid. There are a coupe ways to do this one.

Things to keep in mind: there are a couple ways to account for bad debt. This company, like most retail co's, estimates it's bad debt in advance. Other co's typically write off debt as it occurs; this can involve carrying a lot more accounts on the books.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Accounting - *I don't know where to begin, please HELP* Use the following ...
accounting - Assume that Hickory Copany has the following data related to its ...
Accounting - Use the following adjusted trial balance of Webb Trucking Company ...
accounting - Use the following adjusted trial balance of Webb Trucking Company ...
Accounting - Solve for trade accounts receivable, allowance for doubtful ...
accounting - Part 5 Cash Budgeting Landis Company has the following sales ...
Accounting - Use the following adjusted trial balance of Webb Trucking Company ...
Accounting - Complete the six-column table by entering adjustments that reflect ...
Accounting - I am having trouble with this problem that is due tonight. Can ...
Accounting - Assume that Hickory Company has the following data related to its ...

Members