View the step-by-step solution to:


SensaAquaSports Corp. (SAN) is a publicly re portable enterprise with a December 31 year end. Select details

regarding SAS's accounts receivables (ARs) and allowance for doubtful accounts (AFDA) follow:

Closing balance AFDA 12/31/20X3 $46,750

Net sales 20X4 $12,235,000

Percentage of net sales made on credit terms 90%

Net credit sales in December 20X4 $1,310,000

Monthly estimate of bad debt expense 1% of net credit sales

Bad debts written off in 20X4 during the year $112,000 20X4

collection of ARs written off in 20X3 $1,895

summary aged ARs at 12/31/20X4 specifically identified as being uncollectable % allowance required

1-30 days 985,900 0 1%

31-60 352,500 0 5%

61-90 42,400 16,700 10%

>90 days 12,980 7980 25%

SAS processes a journal entry each month end (including December) to provide for its estimated bad debt expense for the month based on credit sales. At year end, as part of its adjusting entry process, it then uses the aging method to determine the required balance for the AFDA account.

Prepare journal entries to record the following:

a) Recovery of the AR written off in 20X3.

b) Provision for the estimated bad debt expense in December 20X4 based on credit sales.

c) Year-end adjusting entries to provide for the writeoff of specifically identified accounts and to bring the balance of the AFDA account to the required balance as at December 31, 20X4.

Top Answer

Please see below... View the full answer


AFDA, Closing balance 12,1'31f20x3
Net Sales 20x4 Percentage of net sales on credit terms
Net Credit Sales on December 20x4 Monthles estimated bad debt expense 46,750. 00
12,235,000.00 90%...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question