tummygirl
Dec 5, 2007, 12:56 PM
On May 1 AB Plumbing buys plumbing materials with a list price of $550.
At the time of the purchase, EZ gives Halpin a check for $225 and asks Halpin to put the remainder on the purchase on its account, which already has a balance of $475.
Question:
1.)sales revenue for the May 1 transaction : (I say $550)
2.)journal entry will halpin make: (I say, credit sales rev, debit cash, debit acc. Receivable)
3.)balance in acc receivable after the May 1 transaction: (I say $800)
July 1 EZ goes out of busniess without making any addt'l purchases or payments. Halpin learns it will be unable to collect the outstanding receivable balance. Halpin uses the direct write-off method to account for bad-debts.
1.) what entry will halpin make on Jul 1 to record the bad debt?
( I say, Debit bad expense, credit account receivable - EZ plumbing)
At the time of the purchase, EZ gives Halpin a check for $225 and asks Halpin to put the remainder on the purchase on its account, which already has a balance of $475.
Question:
1.)sales revenue for the May 1 transaction : (I say $550)
2.)journal entry will halpin make: (I say, credit sales rev, debit cash, debit acc. Receivable)
3.)balance in acc receivable after the May 1 transaction: (I say $800)
July 1 EZ goes out of busniess without making any addt'l purchases or payments. Halpin learns it will be unable to collect the outstanding receivable balance. Halpin uses the direct write-off method to account for bad-debts.
1.) what entry will halpin make on Jul 1 to record the bad debt?
( I say, Debit bad expense, credit account receivable - EZ plumbing)