Accounting Post Lecture

HW 8-1 ACCOUNTS RECEIVABLE JOURNAL ENTRIES Prepare Journal entries to record the following transactions: (1) On December 15, 2008, the company recorded $1 50,000 sales on credit. (2) On December 31, 2008, the company estimated bad debt expenses of $15,000. (3) On January 1 2, 2009, collect $100,000 worth of accounts receivable. (4) After many collection attempts, the Company determined on June 1 5, 2009 that it would not collect $10,000 in accounts receivables from Pendant Publishing. It decided to write-off this account. ) On July 15, Pendant Publishing called to say that they have had financial problems but can afford to pay $7,000 to settle their $10,000 debt in full. Vandolay Industries agreed to these terms, and reversed $7,000 of the prior write-off. It received a $7,000 check from Pendant the next day. Post the above entries to the following T-accounts: Accounts Receivable HW 8-2 ESTIMATION AND RECORDING OF UNCOLLECTIBLE ACCOUNTS - AGING OF ACCOUNTS RECEIVABLE METHOD Part 1 - In 2009, Vandolay reported $300,000 in sales.

The company''s allowance for doubtful accounts has an unadjusted credit balance of $12,000. Vandolay Industries accountants prepared the following Aging of Accounts Receivable: Customer Total Number of days unpaid 0-30 30-60 60-90 over 90 Alpha Sales $ 700 Gamma Manufacturing Co. $ 1,900 Delta Shipping Corp. 2,200 $2,200 Epsilon Industries 6,000 $6,000 Theta Manufacturing 1 ,800 Zeta Industries Other customers 136,800 88,100 26,900 9,800 12,000 Totals $150,000 $90,000 $30,000 $12,000 $18,000

Vandolay accountants believe that receivables 0-30 days old have a 2% chance of noncollection. Receivables 30-60 days old have a 4% chance of noncollection. Receivables 60-90 days old have an 8% chance of noncollection. Receivables over 90 accounts has an unadjusted credit balance of $12,000. Prepare the required adjusting Journal entry. Bad Debt Expense Allowance for Doubtful Accounts Part 2 - Assume instead that the company''s allowance for doubtful accounts has an unadjusted debit balance of $400. Prepare the required adjusting Journal entry.