Question

Davos Company performed services on account for $160,000 in 2016.

Davos collected $120,000 cash from accounts receivable during 2016, and the remaining $40,000 was collected in cash during 2017.

Record the 2016 transactions in T-accounts.

Answer 1

To record the 2016 transactions in T-accounts for Davos Company, debit the Accounts Receivable and Revenue accounts with $160,000 for services performed on account. Credit the Accounts Receivable and Cash accounts with $120,000 to record cash collected from accounts receivable in 2016. Debit the Cash account and credit the Accounts Receivable account with $40,000 to record the remaining cash collected in 2017.

Step-by-step explanation:

T-accounts for Davos Company:

To record the 2016 transactions in T-accounts for Davos Company, we need to consider the services performed on account, the cash collected from accounts receivable, and the remaining amount collected in cash during 2017. First, we will debit the Accounts Receivable account and credit the Revenue account with $160,000 to record the services performed on account. This increases both the Assets and Equity of the company.

Next, we will debit the Cash account with $120,000 and credit the Accounts Receivable account with the same amount to record the cash collected from accounts receivable. This decreases the Accounts Receivable and increases the Cash. Finally, we will debit the Cash account with $40,000 and credit the Accounts Receivable account with the same amount to record the remaining cash collected in 2017. This further decreases the Accounts Receivable and increases the Cash.