Reference no: EM132696441
Examine the following transaction:
Dr. Accounts Receivable 2,000
Cr. Allowance for Doubtful Accounts 2,000
Dr. Cash 2,000
Cr. Accounts Receivable 2,000
Problem 1: What would be an appropriate journal entry description for this transaction?
Problem 2: Based on the following transactions, prepare the necessary journal entries.
a. During the first year of its business, Cougar Corp. sold services totaling $450,000 were sold on credit.
b. During the first year, Cougar Corp. collected $380,000 in cash for the credit sales made during the year.
c. During the first year, Cougar Corp. properly wrote off $7,000 of its accounts receivable as they were deemed uncollectible.
d. Assume that Cougar Corp. estimates bad debts using the percent-of-receivables method. Cougar Corp. did analysis and has estimated that 10% of their accounts receivable are uncollectible.