Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To Prepare: Journal entriesfor the given transactions.

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Answer 1

Question

Chapter 7, Problem 4PSA

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Expert Solution & Answer

Answer to Problem 4PSA

Date	Accounts title and explanation	Debit $	Credit $
2017
	Account receivables	1,345,434
	Sales		1,345,434
	(to record credit sales)

	Cost of goods sold	975,000
	Merchandise inventory		975,000
	(to record cost of sales)

	Allowance for doubtful debts	18,300
	Accounts receivable		18,300
	(to record writing off uncollectible accounts receivables)

	Cash	669,200
	Account receivables		669,200
	(to record collection of credit sales)

	Bad debt expense¹	28,169
	Allowance for doubtful debts		28,169
	(to record bad debts)

2018
	Account receivables	1,525,634
	Sales		1,525,634
	(to record credit sales)

	Cost of goods sold	1,250,000
	Merchandise inventory		1,250,000
	(to record cost of sales)

	Allowance for doubtful debts	27,800
	Accounts receivable		27,800
	(to record writing off uncollectible accounts receivables)

	Cash	1,204,600
	Account receivables		1,204,600
	(to record collection of credit sales)

	Bad debt expense²	32,199
	Allowance for doubtful debts		32,199
	(to record bad debts)

Explanation of Solution

Working notes

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,345,434 − 669,200 − 18,300

= $657,934

Required closing allowance= 1.5% of $657,934

= $9,869

Required adjustment = Unadjusted existing balance + required closing balance

= $18,300 + $9,869

= $28,169

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,525,634 − 1,204,600 − 27,800

= $293,234

Required closing allowance= 1.5% of $293,234

= $4,399

Required adjustment = Unadjusted existing balance + required closing balance

= $27,800 + $4,399

= $32,199

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Students have asked these similar questions

Ming Company began operations on January 1, 2010. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows: a. Sold $1,347,700 of merchandise (that had cost $982,500) on credit, terms n/30. b. Wrote off $20,676 of uncollectible accounts receivable. c. Received $671,100 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 1.3% of accounts receivable will be uncollectible. 2011 e. Sold $1,517,800 of merchandise (that had cost $1,302,200) on credit, terms n/30. f. Wrote off $32,624 of uncollectible accounts receivable. g. Received $1,118,100 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1.3% of accounts receivable will be uncollectible. Required: Prepare journal entries to…

Liang Company began operations on January 1, 2014. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. 2014 a. Sold $1,351,900 of merchandise (that had cost $978,700) on credit, terms n/30. b. Wrote off $18,200 of uncollectible accounts receivable. c. Received $666,100 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 3.10% of accounts receivable will be uncollectible. 2015 e. Sold $1,563,700 of merchandise (that had cost $1,310,900) on credit, terms n/30. f. Wrote off $28,900 of uncollectible accounts receivable. g. Received $1,248,800 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 3.10% of accounts receivable will be uncollectible. Required: Prepare journal entries to…

The Accounts Receivable balance and Allowance for Bad Debts for Signature Lamp Company at December 31, 2017, was $10,800 and $2,000 (credit balance), respectively. During 2018, Signature Lamp Company completed the following transactions:a. Sales revenue on account, $273,400 (ignore Cost of Goods Sold).b. Collections on account, $223,000.c. Write-offs of uncollectibles, $5,900. Post the transactions to the Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense T-accounts, and determine the ending balance of each account. Journalize Signature Lamp’s adjustment to record bad debts expense assuming Hilltop estimates bad debts as 10% of accounts receivable. Post the adjustment to the appropriate T-accounts.

Answer 2

Question

Chapter 7, Problem 4PSA

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Expert Solution & Answer

Answer to Problem 4PSA

Date	Accounts title and explanation	Debit $	Credit $
2017
	Account receivables	1,345,434
	Sales		1,345,434
	(to record credit sales)

	Cost of goods sold	975,000
	Merchandise inventory		975,000
	(to record cost of sales)

	Allowance for doubtful debts	18,300
	Accounts receivable		18,300
	(to record writing off uncollectible accounts receivables)

	Cash	669,200
	Account receivables		669,200
	(to record collection of credit sales)

	Bad debt expense¹	28,169
	Allowance for doubtful debts		28,169
	(to record bad debts)

2018
	Account receivables	1,525,634
	Sales		1,525,634
	(to record credit sales)

	Cost of goods sold	1,250,000
	Merchandise inventory		1,250,000
	(to record cost of sales)

	Allowance for doubtful debts	27,800
	Accounts receivable		27,800
	(to record writing off uncollectible accounts receivables)

	Cash	1,204,600
	Account receivables		1,204,600
	(to record collection of credit sales)

	Bad debt expense²	32,199
	Allowance for doubtful debts		32,199
	(to record bad debts)

Explanation of Solution

Working notes

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,345,434 − 669,200 − 18,300

= $657,934

Required closing allowance= 1.5% of $657,934

= $9,869

Required adjustment = Unadjusted existing balance + required closing balance

= $18,300 + $9,869

= $28,169

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,525,634 − 1,204,600 − 27,800

= $293,234

Required closing allowance= 1.5% of $293,234

= $4,399

Required adjustment = Unadjusted existing balance + required closing balance

= $27,800 + $4,399

= $32,199

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Answer 3

Question

Chapter 7, Problem 4PSA

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Expert Solution & Answer

Answer to Problem 4PSA

Date	Accounts title and explanation	Debit $	Credit $
2017
	Account receivables	1,345,434
	Sales		1,345,434
	(to record credit sales)

	Cost of goods sold	975,000
	Merchandise inventory		975,000
	(to record cost of sales)

	Allowance for doubtful debts	18,300
	Accounts receivable		18,300
	(to record writing off uncollectible accounts receivables)

	Cash	669,200
	Account receivables		669,200
	(to record collection of credit sales)

	Bad debt expense¹	28,169
	Allowance for doubtful debts		28,169
	(to record bad debts)

2018
	Account receivables	1,525,634
	Sales		1,525,634
	(to record credit sales)

	Cost of goods sold	1,250,000
	Merchandise inventory		1,250,000
	(to record cost of sales)

	Allowance for doubtful debts	27,800
	Accounts receivable		27,800
	(to record writing off uncollectible accounts receivables)

	Cash	1,204,600
	Account receivables		1,204,600
	(to record collection of credit sales)

	Bad debt expense²	32,199
	Allowance for doubtful debts		32,199
	(to record bad debts)

Explanation of Solution

Working notes

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,345,434 − 669,200 − 18,300

= $657,934

Required closing allowance= 1.5% of $657,934

= $9,869

Required adjustment = Unadjusted existing balance + required closing balance

= $18,300 + $9,869

= $28,169

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,525,634 − 1,204,600 − 27,800

= $293,234

Required closing allowance= 1.5% of $293,234

= $4,399

Required adjustment = Unadjusted existing balance + required closing balance

= $27,800 + $4,399

= $32,199

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Answer 4

Question

Chapter 7, Problem 4PSA

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Expert Solution & Answer

Answer to Problem 4PSA

Date	Accounts title and explanation	Debit $	Credit $
2017
	Account receivables	1,345,434
	Sales		1,345,434
	(to record credit sales)

	Cost of goods sold	975,000
	Merchandise inventory		975,000
	(to record cost of sales)

	Allowance for doubtful debts	18,300
	Accounts receivable		18,300
	(to record writing off uncollectible accounts receivables)

	Cash	669,200
	Account receivables		669,200
	(to record collection of credit sales)

	Bad debt expense¹	28,169
	Allowance for doubtful debts		28,169
	(to record bad debts)

2018
	Account receivables	1,525,634
	Sales		1,525,634
	(to record credit sales)

	Cost of goods sold	1,250,000
	Merchandise inventory		1,250,000
	(to record cost of sales)

	Allowance for doubtful debts	27,800
	Accounts receivable		27,800
	(to record writing off uncollectible accounts receivables)

	Cash	1,204,600
	Account receivables		1,204,600
	(to record collection of credit sales)

	Bad debt expense²	32,199
	Allowance for doubtful debts		32,199
	(to record bad debts)

Explanation of Solution

Working notes

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,345,434 − 669,200 − 18,300

= $657,934

Required closing allowance= 1.5% of $657,934

= $9,869

Required adjustment = Unadjusted existing balance + required closing balance

= $18,300 + $9,869

= $28,169

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,525,634 − 1,204,600 − 27,800

= $293,234

Required closing allowance= 1.5% of $293,234

= $4,399

Required adjustment = Unadjusted existing balance + required closing balance

= $27,800 + $4,399

= $32,199

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Answer 5

Chapter 7, Problem 4PSA

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Expert Solution & Answer

Answer to Problem 4PSA

Date	Accounts title and explanation	Debit $	Credit $
2017
	Account receivables	1,345,434
	Sales		1,345,434
	(to record credit sales)

	Cost of goods sold	975,000
	Merchandise inventory		975,000
	(to record cost of sales)

	Allowance for doubtful debts	18,300
	Accounts receivable		18,300
	(to record writing off uncollectible accounts receivables)

	Cash	669,200
	Account receivables		669,200
	(to record collection of credit sales)

	Bad debt expense¹	28,169
	Allowance for doubtful debts		28,169
	(to record bad debts)

2018
	Account receivables	1,525,634
	Sales		1,525,634
	(to record credit sales)

	Cost of goods sold	1,250,000
	Merchandise inventory		1,250,000
	(to record cost of sales)

	Allowance for doubtful debts	27,800
	Accounts receivable		27,800
	(to record writing off uncollectible accounts receivables)

	Cash	1,204,600
	Account receivables		1,204,600
	(to record collection of credit sales)

	Bad debt expense²	32,199
	Allowance for doubtful debts		32,199
	(to record bad debts)

Explanation of Solution

Working notes

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,345,434 − 669,200 − 18,300

= $657,934

Required closing allowance= 1.5% of $657,934

= $9,869

Required adjustment = Unadjusted existing balance + required closing balance

= $18,300 + $9,869

= $28,169

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,525,634 − 1,204,600 − 27,800

= $293,234

Required closing allowance= 1.5% of $293,234

= $4,399

Required adjustment = Unadjusted existing balance + required closing balance

= $27,800 + $4,399

= $32,199

Answer 6

Chapter 7, Problem 4PSA

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Expert Solution & Answer

Answer to Problem 4PSA

Date	Accounts title and explanation	Debit $	Credit $
2017
	Account receivables	1,345,434
	Sales		1,345,434
	(to record credit sales)

	Cost of goods sold	975,000
	Merchandise inventory		975,000
	(to record cost of sales)

	Allowance for doubtful debts	18,300
	Accounts receivable		18,300
	(to record writing off uncollectible accounts receivables)

	Cash	669,200
	Account receivables		669,200
	(to record collection of credit sales)

	Bad debt expense¹	28,169
	Allowance for doubtful debts		28,169
	(to record bad debts)

2018
	Account receivables	1,525,634
	Sales		1,525,634
	(to record credit sales)

	Cost of goods sold	1,250,000
	Merchandise inventory		1,250,000
	(to record cost of sales)

	Allowance for doubtful debts	27,800
	Accounts receivable		27,800
	(to record writing off uncollectible accounts receivables)

	Cash	1,204,600
	Account receivables		1,204,600
	(to record collection of credit sales)

	Bad debt expense²	32,199
	Allowance for doubtful debts		32,199
	(to record bad debts)

Explanation of Solution

Working notes

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,345,434 − 669,200 − 18,300

= $657,934

Required closing allowance= 1.5% of $657,934

= $9,869

Required adjustment = Unadjusted existing balance + required closing balance

= $18,300 + $9,869

= $28,169

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,525,634 − 1,204,600 − 27,800

= $293,234

Required closing allowance= 1.5% of $293,234

= $4,399

Required adjustment = Unadjusted existing balance + required closing balance

= $27,800 + $4,399

= $32,199

Answer 7

Chapter 7, Problem 4PSA

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Answer 8

Expert Solution & Answer

Answer to Problem 4PSA

Date	Accounts title and explanation	Debit $	Credit $
2017
	Account receivables	1,345,434
	Sales		1,345,434
	(to record credit sales)

	Cost of goods sold	975,000
	Merchandise inventory		975,000
	(to record cost of sales)

	Allowance for doubtful debts	18,300
	Accounts receivable		18,300
	(to record writing off uncollectible accounts receivables)

	Cash	669,200
	Account receivables		669,200
	(to record collection of credit sales)

	Bad debt expense¹	28,169
	Allowance for doubtful debts		28,169
	(to record bad debts)

2018
	Account receivables	1,525,634
	Sales		1,525,634
	(to record credit sales)

	Cost of goods sold	1,250,000
	Merchandise inventory		1,250,000
	(to record cost of sales)

	Allowance for doubtful debts	27,800
	Accounts receivable		27,800
	(to record writing off uncollectible accounts receivables)

	Cash	1,204,600
	Account receivables		1,204,600
	(to record collection of credit sales)

	Bad debt expense²	32,199
	Allowance for doubtful debts		32,199
	(to record bad debts)

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Working notes

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,345,434 − 669,200 − 18,300

= $657,934

Required closing allowance= 1.5% of $657,934

= $9,869

Required adjustment = Unadjusted existing balance + required closing balance

= $18,300 + $9,869

= $28,169

To calculate the amount of bad debt:

Closing balance of accounts receivable= credit sales − collections − amount written off

= 1,525,634 − 1,204,600 − 27,800

= $293,234

Required closing allowance= 1.5% of $293,234

= $4,399

Required adjustment = Unadjusted existing balance + required closing balance

= $27,800 + $4,399

= $32,199

Answer 12

Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - Prob. 3DQ Ch. 7 - Prob. 4DQ Ch. 7 - Prob. 5DQ Ch. 7 - Prob. 6DQ Ch. 7 - Prob. 7DQ Ch. 7 - Prob. 8DQ Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ

Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To Prepare: Journal entriesfor the given transactions.

Concept explainers

Videos

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.

Answer to Problem 4PSA

Explanation of Solution

Want to see more full solutions like this?

Chapter 7 Solutions

Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To Prepare: Journal entriesfor the given transactions.

Concept explainers

Videos

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To Prepare: Journal entriesfor the given transactions.

Answer to Problem 4PSA

Explanation of Solution

Want to see more full solutions like this?

Chapter 7 Solutions

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

To Prepare: Journal entriesfor the given transactions.