Question

Sherman Co. began operations on January 1. 2014. and completed several transactions during 2014 and 2015 that involved sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. 2014 Sold dollar 685,350 of merchandise (that had cost dollar 500,000) on credit, terms n/30. Received dollar 482,300 cash in payment of accounts receivable. Wrote off dollar 9,350 of uncollectible accounts receivable. In adjusting the accounts on December 31. the company estimated that 1% of accounts receivable will be uncollectible. 2015 Sold dollar 870,220 of merchandise (that had cost dollar650,000) on credit, terms n/30. Received dollar 990,800 cash in payment of accounts receivable. Wrote off dollar 11.090 of uncollectible accounts receivable. In adjusting the accounts on December 31. the company estimated that 1% of accounts receivable will be uncollectible. Required Prepare journal entries to record Sherman’s 2014 and 2015 summarized transactions and its vear-end adjusting entry to record bad debts expense. (The company uses the perpetual inventory system applies the allowance method for its accounts receivable. Round amounts to the nearest dollar.)



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *