PART V(60 POINTS) On January 1 of the current year, Neptune, Inc. had the following...
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Accounting
PART V(60 POINTS) On January 1 of the current year, Neptune, Inc. had the following accounts on its books:
Accounts Receivable
$240,000
(debit)
Allowance for Doubtful Accounts
8,000
(credit)
Required:
1. Prepare general journal entries for the following transactions that occurred during the year: a. During this year, credit sales were $1,200,000. b. Collections on account were $1,160,000. c. Wrote off N. Purcells account, $6,800.
d. Wrote off J. Steins account, $2,400.
e. Stein, who is in bankruptcy, paid $800 in final settlement of the account written off in transaction (d). This amount is not included in the $1,160,000 collections.
f. On December 31, estimated the years bad debts expense at 1% of credit sales.
2. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the year-end balance sheet. Suggestion: Post the above transactions and January 1 balances to T-accounts for Accounts Receivable and Allowance for Doubtful Accounts.
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