ohnson company’s financial year ended on December 31, 2010. All the transactions related to the company’s uncollectible accounts are can be found below: The accounts receivable account had a balance of $114,630 and the beginning balance in the allowance for uncollectible accounts was $6,200. Required: 1. Prepare journal entries for each transaction. 2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account. 3. Prepare the balance sheet extract as at Dec 31 to show the net realizable value for the Accounts Receivable. 4. Assume that the aging of accounts receivable method was used by the company and that $7,050 of the accounts receivable as of December 31 were estimated to be uncollectible. You are now required to: a. Determine the amount to be charged to uncollectible expense (show your workings for the computation of this figure). b. Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 Answer Question 4 ONLY
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Johnson company’s financial year ended on December 31, 2010. All the
transactions related to the company’s uncollectible accounts are can be found below:
The accounts receivable account had a balance of $114,630 and the beginning balance in the allowance for uncollectible accounts was $6,200.
Required:
1. Prepare
2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account.
3. Prepare the
4. Assume that the aging of accounts receivable method was used by the company and that $7,050 of the accounts receivable as of December 31 were estimated to be uncollectible. You are now required to:
a. Determine the amount to be charged to uncollectible expense (show your workings for the computation of this figure).
b. Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31
Answer Question 4 ONLY
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