Required: Prepare journal entries for each transaction. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account. Prepare the balance sheet extract as at Dec 31 to show the net realizable value for the Accounts Receivable.
Accounting for Assets: Receivables
Johnson company’s financial year ended on December 31, 2010. All the transactions related to the company’s uncollectible accounts are can be found below:
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January 15 |
Wrote of $440 account of Miller Company as uncollectible |
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April 2nd |
Re-establish the account of Louisa Teller and record the collection of $1,050 as payment in full for her account which had been written off earlier |
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July 31 |
Received 40% of the $700 balance owed by William John and wrote off the remainder as uncollectible |
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August 15 |
Wrote off as uncollectible the accounts of Sherwin Company, $1,700 and V. Vasell $2,200 |
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September 26 |
Received 25% of the $1,140 owed by Grant Company and wrote off the remainder as uncollectible |
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October 16 |
Received $741 from M. Fuller in full payment of his account which had been written off earlier as uncollectible |
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December 31 |
Estimated uncollectible accounts expense for the year to be 1.5% of net credit sales of $521,000 |
The accounts receivable account had a balance of $114,630 and the beginning balance in the allowance for uncollectible accounts was $6,200.
Required:
- Prepare
journal entries for each transaction. - Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account.
- Prepare the balance sheet extract as at Dec 31 to show the net realizable value for the Accounts Receivable.
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