On May 31, Cray has $375,800 of accounts receivable. Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250.

1> Prepare journal entries to record the following selected May transactions. The company uses the perpetual inventory system.

2> Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet.

a. Sold $415,200 of merchandise (that cost $249,000) to customers on credit.

b. Received $465,800 cash in payment of accounts receivable.

c. Wrote off $15,800 of uncollectible accounts receivable.

d. In adjusting the accounts on May 31, its fiscal year-end, the company estimated that 4.0% of accounts receivable will be uncollectible.



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