Problem 7-6 The balance sheet of Skysong Company at December 31, 2016, includes
ID: 2395582 • Letter: P
Question
Problem 7-6 The balance sheet of Skysong Company at December 31, 2016, includes the following Notes receivable Accounts receivable Less: Allowance for doubtful accounts $49,500 187,100 23,200 $213,400 Transactions in 2017 include the following. 1. Accounts receivable of $141,400 were collected including accounts of $62,800 on which 2% sales discounts were allowed. 2. $5,900 was received in payment of an account which was written off the books as worthless in 2016. 3. Customer accounts of $23,400 were written off during the year. 4. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $27,300. This estimate is based on an analysis of aged accounts receivable. Prepare all journal entries necessary to reflect the transactions above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually)Explanation / Answer
Note:- Allowance for doubtful accounts
No Accounts title Dr Cr 1 Cash [141400 -)] 140144 Sales discount [$62800 * 2%] 1256 To Accounts Receivable 141400 2 Accounts Receivable 5900 To Allowance for doubtful accounts 5900 [To reinstate the accounts receivable] Cash 5900 To Accounts Receivable 5900 [To record the collection on account] 3 Allowance for doubtful accounts 23400 To Accounts receivable 23400 4 Bad debt expense 21600 To Allowance for doubtful accounts 21600