Ask Question
15 September, 20:41

The balance sheet of Starsky Company at December 31, 2019, includes the following. Notes receivable $36,000 Accounts receivable 182,100 Less: Allowance for doubtful accounts 17,300 $200,800 Transactions in 2020 include the following. 1. Accounts receivable of $138,000 were collected including accounts of $60,000 on which 2% sales discounts were allowed. 2. $5,300 was received in payment of an account which was written off the books as worthless in 2019. 3. Customer accounts of $17,500 were written off during the year. 4. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.

+2
Answers (1)
  1. 15 September, 22:19
    0
    Journal Entry

    Explanation:

    1. Cash Dr, $136,800

    Sales Discount Dr, $1,200

    ($60,000 * 2%)

    To Accounts receivable $138,000

    (Being cash is recorded)

    2. Accounts receivable Dr, $5,300

    To Allowance for doubtful accounts $5,300

    (Being written off is recorded)

    Cash Dr, $5,300

    Accounts receivable $5,300

    (Being payment received is recorded)

    3. Allowance for doubtful accounts Dr, $17,500

    To Accounts receivable $17,500

    (Being written off is recorded)

    4. Bad Debts expense Dr, $14,900

    =$20,000 - ($17,300 + $5,300 - $17,500)

    To Allowance for doubtful accounts $14,900

    (Being bad debt expenses is recorded)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The balance sheet of Starsky Company at December 31, 2019, includes the following. Notes receivable $36,000 Accounts receivable 182,100 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers