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Ch8+Note+Posting - inventory system These transactions are...

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Chapter 8 – Reporting & Analyzing Receivables Guiding Principles: Methods: 1
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Types of Receivables Issue Related to AR Guiding Principles Accounting for Bad Debts 2
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Summary of the transactions that cause changes in Accounts Receivable and AFDA Cash Dr (+) Cr (—) (2) Collection of Credit Sales (6) Collection of written off AR Accounts Receivable Allowance for Doubtful Accounts Dr (+) Cr (—) Dr (—) Cr (+) (1) Sales on Credit (2) Collection of Credit Sales (3) Adj estimated uncollectable amount (4) Write off of uncollectable AR (4) Write off of uncollectable AR (5) Recovery of previously written-off AR (6) Collection of written off AR (5) Recovery of previously off-off AR Bad Debt Expense Sales Dr (+) Cr (—) Dr (—) Cr (+) (3) Adj estimated uncollectable amount (1) Sales on Credit 4
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Chapter 8 – Additional Question: AR & AFDA Mita Industries began operations on January 1, 2009. During the next two years, the company completed a number of transactions involving credit sales, accounts receivable collections, and bad debts (assume a perpetual
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Unformatted text preview: inventory system). These transactions are summarized as follows: 2009 a. Sold merchandise on credit for $1,144,500, terms n/30 (CGS = $620,000). b. Wrote off uncollectible accounts receivable in the amount of $17,270. c. Received cash of $667,230 in payment of outstanding accounts receivable. d. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible. 2010 e. Sold merchandise on credit for $1,470,780, terms n/30 (CGS = $796,000). f. Wrote off uncollectible accounts receivable in the amount of $26,880. g. Received cash of $1,103,900 in payment of outstanding accounts receivable. h. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible. Required Prepare journal entries to record Mita’s 2009 and 2010 summarized transactions and the adjusting entries to record bad debt expense at the end of each year. 5...
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