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.

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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.

To prepare the necessary journal entries for recording all the preceding transactions relating to uncollectibles on the books of Sporting House, you can follow these steps:

1. Beginning balance of A/R for 2006:
- Debit Accounts Receivable $150,000
- Credit Beginning Retained Earnings $150,000 (assuming there is no specific allowance for bad debt account)

2. Determine the estimated bad debt amount for 2006:
- Calculate 2% of credit sales: $3,500,000 x 0.02 = $70,000
- Debit Bad Debt Expense $70,000
- Credit Allowance for Bad Debt $70,000 (or a similar account if specified in your text)

3. Record the collection of 80% of credit sales in 2006:
- Calculate 80% of credit sales: $3,500,000 x 0.8 = $2,800,000
- Debit Cash $2,800,000
- Credit Accounts Receivable $2,800,000

4. Write off the account of Sybrowsky in 2007:
- Debit Allowance for Bad Debt $4,200
- Credit Accounts Receivable $4,200

5. Record the collection of the previously written-off amount from Mr. Sybrowsky:
- Debit Accounts Receivable $4,200
- Credit Allowance for Bad Debt $4,200

Make sure to consult your textbook or accounting guidelines to ensure the accuracy and appropriateness of the accounts used in your specific context.