Reference no: EM132882108
Problem - Analyzing Accounts Receivable - Upham Company's June 30, 2019, balance sheet included the following information:
Accounts receivable $224,000
Less: Allowance for doubtful accounts (14,100) $209,900
Notes receivable* 21,800
Total receivables $231,700
*The company has a recourse liability of $2,250 for notes receivable sold with recourse.
During the company's fiscal year ending June 30, 2020, the following transactions occurred:
1. Sales on credit $874,600
2. Collections of accounts receivable 841,000
3. Accounts receivable written off as uncollectible 13,800
4. Customer notes received in payment of accounts receivable 13,800
5. Notes receivable collected 29,000
6. Notes receivable, previously sold with recourse, were paid at maturity. The associated recourse liability for this note is $800. 36,000
7. Notes receivable were defaulted. 2,025
8. Collections on accounts previously written off 500
9. Bad debts were estimated to be 1.5% of credit sales.
Required -
1. Prepare the journal entries necessary for Upham to record the preceding transactions.
2. Prepare an analysis and schedule that shows the amounts of the accounts receivable, allowance for doubtful accounts, notes receivable, and notes receivable dishonored accounts that will be disclosed on Upham's June 30, 2020, balance sheet.