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12 April, 23:53

The balance sheet of Concord Company at December 31, 2016, includes the following.

Notes receivable $37,800

Accounts receivable 189,600 Less:

Allowance for doubtful accounts 20,400 $207,000

Transactions in 2017 include the following.

1. Accounts receivable of $140,500 were collected including accounts of $65,800 on which 3% sales discounts were allowed.

2. $5,500 was received in payment of an account which was written off the books as worthless in 2016.

3. Customer accounts of $20,600 were written off during the year.

4. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $23,100. This estimate is based on an analysis of aged accounts receivable.

-Prepare all journal entries necessary to reflect the transactions above.

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Answers (1)
  1. 13 April, 00:06
    0
    Answer and Explanation:

    The Journal Entry is shown below:-

    1. Cash Dr, $138,526

    Discount on sales Dr, $1,974

    $65,800 * 3%

    To account receivable $140,500

    (Being cash received on accounts receivable is recorded)

    2. Accounts receivable Dr, $5,500

    To Allowance for doubtful debts $5,500

    {Being cash received against accounts receivable written off is recorded)

    3. Allowance for doubtful debts Dr, $20,600

    To Accounts receivable $20,600

    (Being accounts receivable written off is recorded)

    4. Bad debts Dr, $17,800

    To Allowance for doubtful debts $17,800

    (Being Allowance for doubtful debts created for bad debts is recorded)

    Working Note for 4th entry

    Allowance for doubtful debts

    Particulars Amount Particulars Amount

    To accounts receivable $20,600 By balance b/d 20,400

    By account receivable $5500

    to balance $23,100 By bad debts $17,800

    Total $43,700 Total $43,700
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