On January 1 of the current year, Slaton, Inc. had the following accounts on its books:

During this year, credit sales were $600,000 and collections on account were $580,000.
Required:
a. Prepare general journal entries for the following transactions that occurred during the year:
(1) Wrote off L. Baxter's account, $3,400.
(2) Wrote off N. Vale's account, $1,200.
(3) N. Vale, who is in bankruptcy, paid $400 in final settlement of the account written off in transaction (2). This amount is not included in the $580,000 collections.
(4) On December 31, estimated the year's bad debts expense at 1% of credit sales.
b. Determine the balance of Accounts Receivable and the Allowance for Doubtful Accounts at year-end.

Question

On January 1 of the current year, Slaton, Inc. had the following accounts on its books: 
 
 During this year, credit sales were $600,000 and collections on account were $580,000.
Required:
a. Prepare general journal entries for the following transactions that occurred during the year:
(1) Wrote off L. Baxter's account, $3,400.
(2) Wrote off N. Vale's account, $1,200.
(3) N. Vale, who is in bankruptcy, paid $400 in final settlement of the account written off in transaction (2). This amount is not included in the $580,000 collections.
(4) On December 31, estimated the year's bad debts expense at 1% of credit sales.
b. Determine the balance of Accounts Receivable and the Allowance for Doubtful Accounts at year-end.

Quizplus · Accepted Answer

The Answer of On January 1 of the current year, Slaton, Inc. had the following accounts on its books: 
 
 During this year, credit sales were $600,000 and collections on account were $580,000.
Required:
a. Prepare general journal entries for the following transactions that occurred during the year:
(1) Wrote off L. Baxter's account, $3,400.
(2) Wrote off N. Vale's account, $1,200.
(3) N. Vale, who is in bankruptcy, paid $400 in final settlement of the account written off in transaction (2). This amount is not included in the $580,000 collections.
(4) On December 31, estimated the year's bad debts expense at 1% of credit sales.
b. Determine the balance of Accounts Receivable and the Allowance for Doubtful Accounts at year-end.

On January 1 of the Current Year, Slaton, Inc