Pool Corporation, Inc., is the world's largest wholesale distributor of swimming pool supplies and equipment. Pool Corp. reported the following information related to bad debt estimates and write-offs for a recent year. Allowance for doubtful accounts: Balance at beginning of year $ 7,802 Bad debt expense 3,378 Write-offs (4,510) Balance at end of year $ 6,670 Required: 1. Prepare journal entries for the bad debt expense adjustment and total write-offs of bad debts for the current year. 2. Pool Corp. reduces net sales by the amount of sales returns and allowances, cash discounts, and credit card fees. Bad debt expense is recorded as part of selling and administrative expense. Assume that gross sales revenue for the month was $140,756, bad debt expense was $216, sales discounts were $1,344, sales returns were $996, and credit card fees were $2,129. What amount would Pool Corp. report for net sales for the month?

Question

Orlando Sullivan

Business

2 August, 00:07

Pool Corporation, Inc., is the world's largest wholesale distributor of swimming pool supplies and equipment. Pool Corp. reported the following information related to bad debt estimates and write-offs for a recent year. Allowance for doubtful accounts: Balance at beginning of year $ 7,802 Bad debt expense 3,378 Write-offs (4,510) Balance at end of year $ 6,670 Required: 1. Prepare journal entries for the bad debt expense adjustment and total write-offs of bad debts for the current year. 2. Pool Corp. reduces net sales by the amount of sales returns and allowances, cash discounts, and credit card fees. Bad debt expense is recorded as part of selling and administrative expense. Assume that gross sales revenue for the month was $140,756, bad debt expense was $216, sales discounts were $1,344, sales returns were $996, and credit card fees were $2,129. What amount would Pool Corp. report for net sales for the month?

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Philip Oconnell · Answer 1

1. The journal entries are shown below:

Bad debt expense A/c Dr $3,378

To Allowance for doubtful debts A/c $3,378

(Being bad debt expense is recorded)

Allowance for doubtful debts A/c Dr $4,510

To Account receivable A/c $4,510

(Being written off amount is recorded)

2. The computation of the net sales is shown below:

= Gross sales - sales discount - sales return - credit card fees

= $140,756 - $1,344 - $996 - $2,129

= $136.287