accounting - please try to help

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.

  1. 👍
  2. 👎
  3. 👁

Respond to this Question

First Name

Your Response

Similar Questions

  1. accounting

    List the following steps of the accounting cycle in their proper order a. Preparing the post closing trial balance b. postint the journal entries c. journalizing and posting adjusting entries d. preparing the adjusted trial

  2. Math

    Anika's checking account had a balance of $3,100.55 on July 1. After looking at her bank statement, she noticed an NSF for $60.50, a service charge of $12.55, and a note collected for $600. There was one deposit in transit for

  3. Math

    Samuel withdraws $5,000 each month from his bank account to finance his new business. His account had an initial balance of $325,000. After how many months will his balance be $175,000 if he makes no deposits to the account?

  4. Accounts

    Which of the following errors would cause the trial balance to be out of balance? An entry is posted twice. An entry is not posted at all. A debit is entered as $200 and the credit is entered at $2,000. None of the above answers

  1. math

    . The bank statement of July 31 for Walgreens showed a balance of $6,008.10, and the checkbook showed a balance of $1,900.40. The bookkeeper of Walgreens noticed from the bank statement that the bank had collected a note for

  2. Finite Math

    Five years ago, Diane secured a bank loan of $370,000 to help finance the purchase of a loft in the San Francisco Bay area. The term of the mortgage was 30 years, and the interest rate was 10% per year compounded monthly on the

  3. Accounting ll

    The board of directors announces a 2-for-1 stock split on 20,000 outstanding shares of $15.00 par common stock. Immediately after the stock split, the A. outstanding shares increase to 40,000. B. outstanding shares decrease to

  4. Accounting

    Complete the six-column table by entering adjustments that reflect the following information: a. As of December 31, 2005, employees had earned $900 of unpaid and unrecorded salaries. The next payday is January 4, at which time

  1. math

    Orlando has a bank statement balance of $414.25 and $5.90 service charge. His check register shows $374.16 and he has two outstanding checks of $26.54 and $21.78. What is his true balance?

  2. Accounting

    Julie Molony opened Julie's Maids Cleaning Service on July 1, 2010. During July, the company completed the transactions. July 1 Invested $14,000 cash in the business 1 Purchased a used truck for $10,000 paying $3,000 cash and the

  3. acc 280

    P3-1 A Tony Masasi started his own consulting firm, Masasi Company, Inc., on June 1, 2008. The trial balance at June 30 is shown on page 129. MASASI COMPANY, INC. Trial Balance June 30, 2008 Account Number Debit Credit 101 Cash

  4. finance

    computing checking account balance. based on the following information,determine the true balance in your checking account. balance in your checkbook-$356 balance on bank statement,$472 service charge and other fees, $15 interest

You can view more similar questions or ask a new question.