Reference no: EM132714795
Question - Smith Ltd. was in the process of preparing year-end adjusting entries for the year ended December 31, 2018. Smith Ltd. had the following balance in their books (ledger):
Debit Credit
Accounts receivable $91,000
Allowance for sales discounts $4,500
Allowance for sales returns 3,300
Allowance for doubtful accounts 12,200
Additional Information:
Total Credit Sales during 2018: $66,000
The Company estimated the following for the year-end December 31, 2018 purposes:
Expected sales discounts $3,500
Expected sales returns 4,100
Accounts receivable should be written off 4,400 using percentage of credit sales method, the company estimated 10% of the credit sales might not be collected.
Required -
a) Prepare the year-end entries for the above that are related to accounts receivable?
b) Calculate the amount that would be displayed on SFP for net accounts receivable?