Question & Answer: Jan. 9 Sold merchandise on account to Rick's Supply, $1,600……

Jan. 9 Sold merchandise on account to Rick’s Supply, $1,600.

Jan 15 Wrote off the account of Pete Redding as uncollectible because of his death, $1,000.

Mar 17 Received $550 from Romo Co., whose account had been written off in 2014. The account was reinstated and the collection recorded.

Apr. 9 Received 18% of the $4,400 owned by Lane Davis. The remainder was written off as uncollectible.

Jan 15 The account for Mac’s Garage was reinstated for $1, 100. The account was written off 3 years ago and collectedin full today.

Oct. 18 Prepared a compound entry to write the following acounts off as uncollectible: Jim’s Diner. $200; Kailey Auto, $420; Ralph’s Hardware, $700.

Nov 12 Sold merchandise on account to J.B. Rug, $1,700.

Dec 31 Based on an aging of Accounts Receivable , it was estimated that $7, 400 will be uncollectible out of a total of $175,000 in Accounts Receivable.

Dec 31 Closed Bd Debts Expense to Income Summary

A. Journalize the transactions. The company uses the periodic method.

B. Post to Allowance for Doubtful Accounts, Income Summary, and Bad Debts Expense accounts as needed. (Be sure to record the beginning balance in the Allowance account in the working papers that accompany this text.)

C. Prepare a current assets section of the balance sheet. Ending balances needed are as follows: Cash, $12,500; Accounts Receivable, $175,000; Office Supplies, $2,150; Merchandise Inventory, $107,000; Prepaid Rent, $1,150.