Janelle Co Inc. generated $5.5 million in credit sales during the current year. Based on past experience, it is estimated that 1.5% of all credit sales will prove to be uncollectible. The balance of the allowance for doubtful accounts at December 31 is $8,900 credit. Accounts receivable at December 31 consists of the following: Instructions
a) Calculate and record the journal entry for bad debt expense for the current year using the percentage of credit sales method.
b) Janelle Co. has decided to writeoff all the accounts that were over 120 days old. Record the journal entry.
c) What is the balance for Accounts Receivable as shown on the December 31 statement of financial position?
d) One of the customers whose $5,000 account was written off, paid Janelle Co. in full. Record the journal entry.

Question

Janelle Co Inc. generated $5.5 million in credit sales during the current year. Based on past experience, it is estimated that 1.5% of all credit sales will prove to be uncollectible. The balance of the allowance for doubtful accounts at December 31 is $8,900 credit. Accounts receivable at December 31 consists of the following:  Instructions 
a) Calculate and record the journal entry for bad debt expense for the current year using the percentage of credit sales method.
b) Janelle Co. has decided to writeoff all the accounts that were over 120 days old. Record the journal entry.
c) What is the balance for Accounts Receivable as shown on the December 31 statement of financial position?
d) One of the customers whose $5,000 account was written off, paid Janelle Co. in full. Record the journal entry.

Quizplus · Accepted Answer

The Answer of Janelle Co Inc. generated $5.5 million in credit sales during the current year. Based on past experience, it is estimated that 1.5% of all credit sales will prove to be uncollectible. The balance of the allowance for doubtful accounts at December 31 is $8,900 credit. Accounts receivable at December 31 consists of the following:  Instructions 
a) Calculate and record the journal entry for bad debt expense for the current year using the percentage of credit sales method.
b) Janelle Co. has decided to writeoff all the accounts that were over 120 days old. Record the journal entry.
c) What is the balance for Accounts Receivable as shown on the December 31 statement of financial position?
d) One of the customers whose $5,000 account was written off, paid Janelle Co. in full. Record the journal entry.