[Holmesbd]

a. Sold $1,351,500 of merchandis (that had cost $980,000) on credit, terms n/30

b. Wrote off $21,600 of uncollectible accounts receivable.

c. Received $669,500 cash in payment of accounts receivable.

d. In adjusting the acounts on December 31, the company estimated that 2.2% of accounts
Receivable will be uncollectible.

This is the accounting problem above, I need the figures for:

Bad debts Expense Debit____________________________
Allowance for doubtful accounts Credit ________________________


I have tried subtracting the amount that was wrote off 21,600 from accounts receivable and it is incorrect. PLEASE HELP. I DO NOT KNOW HOW TO GET THESE TWO AMOUNTS

[morgaine300]

I have tried subtracting the amount that was wrote off 21,600 from accounts receivable and it is incorrect.

Written off, not wrote off.

While the 21,600 does come out of receivables, what else do you have in here that affects receivables? Is writing off accounts the only thing a company does during the year that affects the receivables account? What do sales on account do? What do receiving payments on account do?

And the number you come up with there is the balance in the receivables account. What about the part where the problem mentions the 2.2% of the receivables? You're not journalizing the balance in the receivables. (You never journalize a balance.)