Answer:
<u>Explanation:</u>
Requirement :
Date Account title and Explanation Debit Credit
Dec.31 Accounts receivable $2,346,000
Sales revenue $2,346,000
[To record credit sales for the year]
Dec.31 Cash $2,350,000
Accounts receivable $2,350,000
[To record collections on account for the year]
Feb.17 Allowance for doubtful account $7,500
Accounts receivable-R.St. John $7,500
[To write off R. St. John's account]
May 28 Allowance for doubtful account $4,800
Accounts receivable-G. Herberger $4,800
[To write off G. Herberger's account]
Oct 13 Accounts receivable-G. Herberger $1,200
Allowance for doubtful account $1,200
[To reinstate G. Herberger's account for partil recovery]
Oct 13 Cash $1,200
Accounts receivable-G. Herberger $1,200
[To record collection from G. Herberger]
Dec 15 Allowance for doubtful account $5,000
Accounts receivable-R. Clancy $5,000
[To write-off R. Clancy's account]
Dec 31 Bad debt expense [$2,346,000 x 0.8%] $18,768
Allowance for doubtful account $18,768
[To record allowance for doubtful accounts]
<u>Requirement b:
</u>
Accounts Receivable $242,700
Less: Allowance for Doubtful accounts $19,168
Accounts receivable net $223,532
<u>Calculations:
</u>
T-Accounts
Accounts receivable Allowance for doubtful account
$264,000 Beg. $16,500 Beg.
$2,346,000 $2,350,000 $7,500 $1,200
$1,200 $7,500 $4,800 $18,768
$4,800 $5,000
$1,200
$5,000
$242,700 End. $19,168 End.
