Question

At the beginning of the current period, Sheridan Company had balances in Accounts Receivable of $203,500 and in Allowance for Doubtful Accounts of $8,620 (credit). During the period, it had net credit sales of $739,000 and collections of $813,450. It wrote off as uncollectible accounts receivable of $7,198. However, a $2,978 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $26,810 at the end of the period. (Omit cost of goods sold entries.)

Required:
a. Prepare the entries to record sales and collections during the
b. Prepare the entry to record the write-off Of accounts the period.
c. Prepare the entries to record the recovery of the uncollectible account during the period.
d. Prepare the entry to record bad debt expense for the period.

Answer 1

To record sales and collections, debit Accounts Receivable and credit Sales. To record the write-off of accounts, debit Allowance for Doubtful Accounts and credit Accounts Receivable. To record the recovery of the uncollectible account, debit Accounts Receivable and credit Allowance for Doubtful Accounts. To record bad debt expense for the period, debit Bad Debt Expense and credit Allowance for Doubtful Accounts.

Step-by-step explanation:

a. To record sales and collections:

Debit Accounts Receivable

Credit Sales

Debit Cash

Credit Accounts Receivable

b. To record the write-off of accounts:

Debit Allowance for Doubtful Accounts

Credit Accounts Receivable

c. To record the recovery of the uncollectible account:

Debit Accounts Receivable

Credit Allowance for Doubtful Accounts

d. To record bad debt expense for the period:

Debit Bad Debt Expense

Credit Allowance for Doubtful Accounts

Answer 2

Sheridan Company

a. Debit Accounts receivable $739,000

Credit Sales revenue $739,000

To record sales of goods on account.

Debit Cash $813,450

Credit Accounts receivable $813,450

To record collections from customers.

b. Debit Allowance for Uncollectible Accounts $7,198

Credit Accounts receivable $7,198

To record the write-off of accounts for the period.

c. Debit Accounts receivable $2,978

Credit Allowance for Uncollectible Accounts $2,978

To record the recovery of the uncollectible account.

d. Debit Bad Debts Expense $22,410

Credit Allowance for Uncollectible Accounts $22,410

To record bad debt expense for the period.

Step-by-step explanation:

a) Data and Analysis:

a. Accounts receivable $739,000 Sales revenue $739,000

b. Cash $813,450 Accounts receivable $813,450

c. Allowance for Uncollectible Accounts $7,198 Accounts receivable $7,198

d. Accounts receivable $2,978 Allowance for Uncollectible Accounts $2,978

e. Bad Debts Expense $22,410 Allowance for Uncollectible Accounts $22,410

Allowance for Uncollectible Accounts

Account Titles Debit Credit

Beginning balance $8,620

Accounts receivable $7,198

Accounts receivable 2,978

Bad debts expense 22,410

Ending balance 26,810

Totals $34,008 $34,008