Reference no: EM13902760
Sherman Co. began operations on January 1, 2012, and completed several transactions during 2012 and 2013 that involved sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows.
2012
a. Sold $ 685,350 of merchandise (that had cost $ 500,000) on credit, terms n/ 30.
b. Received $ 482,300 cash in payment of accounts receivable.
c. Wrote off $ 9,350 of uncollectible accounts receivable.
d. In adjusting the accounts on December 31, the company estimated that 1% of accounts receivable will be uncollectible.
2013
e. Sold $ 870,220 of merchandise (that had cost $ 650,000) on credit, terms n/ 30.
f. Received $ 990,800 cash in payment of accounts receivable.
g. Wrote off $ 11,090 of uncollectible accounts receivable.
h. In adjusting the accounts on December 31, the company estimated that 1% of accounts receivable will be uncollectible.
Required:
Prepare journal entries to record Sherman's 2012 and 2013 summarized transactions and its year end adjusting entry to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable. Round amounts to the nearest dollar.)
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