Problem 7-6 The balance sheet of Marigold Company at December 31, 2016, includes
ID: 2579458 • Letter: P
Question
Problem 7-6 The balance sheet of Marigold Company at December 31, 2016, includes the following. Notes receivable Accounts receivable Less: Allowance for doubtful accounts $38,600 188,900 17,700 209,800 Transactions in 2017 include the following. 1. Accounts receivable of $148,500 were collected including accounts of $70,100 on which 3% sales discounts were 0 was received in payment of an account which was written off the books as worthless in 2016 allowed. Customer accounts of $17,900 were written off during the year. At year-end, Allowance for Doubtful Accounts was estimated ton an analysis of aged accounts receivable. 3. 4. al entries necessary to reflect the transactions above. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. Debit Credit 2. To reinstate the accounts receivable)Explanation / Answer
Note for Journal Entries Notes: 1 Dscountable AR = $ 70,100 Discount @ 3% of $ 70,100= $ 2,103 Total AR Collected = $ 1,48,500 Net Amount Collected = $ 1,46,397 Notes: 2 Allowance for Doubtfull Debts (Opening Bal.) $ -17,700 Credit Amount received Earlier Write off $ -6,140 Credit New Write off $ 17,900 Debit $ -5,940 Less: Closing Balance Estimated at end $ -28,500 Credit New Provision will be made $ 22,560 Credit Journal Entries Date Account Title and explanation Debit Credit 1 Cash Account $ 1,46,397 Sales Discount $ 2,103 To Account Recievable $ 1,48,500 (To Record the Account Receievable Collection) Cash Account $ 6,130 2) To Allowance for Doutfull Debts $ 6,130 (To Record the collection of old Write off) Allowance for Doutfull Debts $ 17,900 3 To Account Receivable $ 17,900 (To Record the write off the customer account) Bad Debt Expenses $ 22,560 4 To Allowance for Doubbtful Debts $ 22,560 (To Record the allowance for Doubtfull Debts)