Instructions: Prepare journal entries to record the 2017 transactions of Milk&Co
ID: 2599945 • Letter: I
Question
Instructions: Prepare journal entries to record the 2017 transactions of Milk&Cookies; Inc. Mik & Cookies is using the Allowance Method. (6 points) 12a. On December 1", 2017, Milk & Cookies estimated $12,500 of its will be uncollected. receiyáble from Farmville 12b. On December 15h, 2017, the estimated uncollectible receivable for Farmville yfas writen off by Milk & Cookies Inc. o% 12c. On December 29%, unexpectedly Milk &Cookies; Inc. received a check ayment) of $$,200 from Farmville AGE 8I12 FALL 2017 SECOND MIDTERMExplanation / Answer
Date Account titles Debit Credit 12a. Dec. 1 Baddebt expense 12500 Allowance for doubtful accounts 12500 (Estimated uncollectible amount) 12b. Dec. 15 Allowance for doubtful accounts 12500 Accounts receivable 12500 (Written off Estimated uncollectible amount) 12c. Dec. 29 Accounts receivable 8200 Allowance for doubtful accounts 8200 (reversed the write-off entry) Cash 8200 Accounts receivable 8200 (Recorded the recovery of cash) 14 Accounts receivable turnover=Net sales/Average accounts receivable a. Net sales 595000 b. Beginning accounts receivable 80000 c. Ending accounts receivable 60000 d. Average accounts receivable [(b)+©]/2 70000 e. Accounts receivable turnover 8.50 times Answer is b. 8.5 times 15 Average collection period=365/Accounts receivable turnover=365/8.5= 42.9 days Answer is c. 42.9 days