Problem Solutions – Chapter 4105PROBLEM SOLUTIONS 4-1 Accounts Receivable TransactionsJournal entries: a. Accounts Receivable 5,600,000Sales Revenue 5,600,000 b. Bad Debt Expense* 56,000Allowance for Bad Debts 56,000 c. Allowance for Bad Debts 68,400Accounts Receivable 68,400 d. Accounts Receivable 9,600Allowance for Bad Debts 9,600 Cash 9,600Accounts Receivable 9,600 e. Bad Debt Expense** 8,000Allowance for Bad Debts 8,000 * 1% x $5,600,000 = $56,000 **Allowance account analysis: Allowance for Bad Debts 18,800 68,400 56,000 9,600 8,00024,000 (2% x $1,200,000)An additional $8,000 credit is needed to bring the balance up to $24,000
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