Beginning operations in Jan 1, 2012 A corporation completed number of transactions during 2012 and 2013 that involved credit sales, accounts receivable collections and bad debts. Transactions summarized below:
2012:
a. Sold Merchandise on credit for $277,400 terms n/30
b. Received cash of $390,600 in payments of outstanding Accounts Receivable
c. Wrote off uncollectible accounts receivable in amount of $800.
d. In adjusting the accounts on December 31, concluded that 1.5% of outstanding A/R would become uncollectible.
2013:
e. Sold merchandise on credit for $375,000 terms n/30
f. Received cash of $390,600 in payments of outstanding A/R
g. wrote off uncollectible accounts receivable in amount of $1,200
h. in adjusting the accounts on Dec 31 concluded that 1.5% of outstanding A/R would be uncollectible.
- Prepare General Journal entries to record 2012 and 2013 transactions, and adjusting entries to record bad debt expense at end of each year.