Question

Assume the Hawthorne Manufacturing Company started operations in 2021. It had sales of $1,200,000 and collections of $895,000. What is the balance of A/R as of December 31, 2021?

a. Hawthorne's analysis indicates it expects to collect $280,000 of it a/r. What is the appropriate journal entry?
b. On April 24, 2022, Hawthorne concludes that it will not collect a $15,000 a/r form a customer. What is the entry?
c. On May 30, the financial situation of that customer has improved and Hawthorne will collect $1,200 of the receivable. What is the entry?
After these entries, what is the balance sheet as of December 31, 2022?

Answer 1

The balance of Accounts Receivable for Hawthorne Manufacturing Company as of December 31, 2021, is $305,000. Appropriate journal entries for expected collections, uncollectible A/R, and subsequent collections have been illustrated. Additional information is required to determine the exact December 31, 2022, balance sheet.

Step-by-step explanation:

After these entries, the balance sheet would reflect these changes in the Accounts Receivable and any corresponding accounts affected by the allowance for doubtful accounts and actual collections. Calculating the exact balance sheet as of December 31, 2022, would require additional financial information for that period.