Question 3 15 Marks Suggested time allocation: 27 Minutes At December 31, 2017, House Co....
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Question 3 15 Marks Suggested time allocation: 27 Minutes At December 31, 2017, House Co. reported the following information on its balance sheet. $ Accounts receivable 960,000 80,000 Less: Allowance for doubtful accounts During 2018, the company had the following transactions related to receivables 1. Sales on account 3,700,000 50,000 2,810,000 90,000 29,000 2. Sales returns and allowances 3. Collections of accounts receivable 4. Write-offs of accounts receivable deemed uncollectible 5. Recovery of bad debts previously written off as uncllectible Required: a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were (6 marks) taken on the collections of accounts receivable. b) Enter the January 1, 2018, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts, and determine the balances Accounts receivable $1,710,000 i Allowance for Doubtful Accounts $19,000 (6 marks) i. c) Prepare the journal entry to record bad debt expense for 2018, if an ageing of accounts receivable indicates that expected bad debts are $115,000
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