On January 1, 2009, the Union Trading Company had outstanding receivables of $800,000 and allowance for doubtful accounts of $ 19,000.
During the period 1/1 to 6/30, 2009, the firm made $1,500,000 of credit sales, wrote off $22,000 of receivables as uncollectible, and collected $1,200,000 in cash from credit customers.
On 6/30, the company estimated uncollectible accounts to be 2% of outstanding receivables.
Required:
A. Calculate the bad debt expense for this period.
B. Make necessary journal from 1/1 to the adjusting of the receivables on 6/30.
C. Show the ledger accounts: Accounts receivable and Allowance for doubtful accounts.
These are the answers I get , could you tell me if it's right?
A) I get the bad debt expense as 24560
B) Accounts receivable 1,500,000
Sales Revenue 1,500,000
Cash 1,200,000
Accounts receivable 1,200,000
Bad debts 24,560
Allowance for uncollectible accounts 24,560
Allowance for uncolectible accounts 22,000
Accounts receivable 22,000
C) Accounts receivable
Date Date
1/1/2009 Beginning balance 800,000 Cash 1,200,000
Credit sales 1,500,000 Allowance for uncollectble accounts 22,000
6/30/2009 Balance 1,078,000
Allowance for uncollectible accounts
Date Date
accounts receivable 22,000 1/1/2009 Beginning balance 19,000
Bad dedts 24,560
6/30/2009 Balance 21,560
