Reference no: EM132251172

Question - Listed below are the beginning balances of Cash, Accounts Receivable, and Allowance for Doubtful Accounts [items (a)-(c)], and summary transactions that occurred during the year [items (d)-(g)].

(a) Balance of Cash, January 1, 20--$300,000

(b) Balance of Accounts Receivable, January 150,000

(c) Balance of Allowance for Doubtful Accounts, January 15,000

(d) Sales on account during 20--550,000

(e) Collections on account during 20--530,000

(f) Uncollectible accounts written off during 20--4,500

(g) Collections made on accounts written off during 20--500

Required:

1. Enter items (a) through (c) in general ledger accounts.

2. Prepare entries in a general journal for summary transactions (d) through (g).

3. Post the entries to a general ledger for Sam, using the following accounts and numbers.

Cash 101

Accounts Receivable 122

Allowance for Doubtful Accounts 122.1

Sales 401

Bad Debt Expense 532

4. Estimate that 1% of all sales on account will be uncollectible. Calculate the estimated bad debt expense and make the appropriate adjusting entry in a general journal. Post the entry to the general ledger accounts on December 31, 20--.

5. Compute the net realizable value of Sam's accounts receivable on December 31, 20--.