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Journal Entries - Daniel Company Accounts Receivable

The 31 December 2004 balance sheet of Daniel Company showed an Accounts Receivable balance of $440,000 and a credit balance in Allowance for Uncollectible Accounts of $88,000.

During the financial year ended 31 December 2005, the following transactions occurred: sales of $2,338,000 which included credit sales of $2,104,000; credit sales returns $127,000; collection from credit customers $1,932,000; discount allowed $120,000; accounts written off $30,000; collection of previously written off accounts $9,000.

Required:
A. Using the above information, prepare journal entries to record:
1. credit sales;
2. credit sales returns;
3. collection from credit customers;
4. discount allowed; and
5. collection of previously written off accounts.

B. Prepare journal entries to record the bad debts expenses for the year 2005 using the following bases:
1. direct write-off method;
2. allowance method and the percentage of sales basis (bad debts expense was estimated as 1% of net credit sales); and
3. allowance method and the percentage of accounts receivable basis (estimated bad debts amounted to 6% of accounts receivable)

C. Prepare the Accounts Receivable account for the year 2005.

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A. Using the above information, prepare journal entries to record:
1 credit sales;
Debit Credit
Debtors A/c ...

Solution Summary

Journal entries required are shown for you.

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