Accounting for Receivables

At December 31, 2018, House Co. reported the following information on its balance sheet.
Accounts receivable$960,000
Less: Allowance for doubtful accounts80,000

During 2019, the company had the following transactions related to receivables.

1Sales on account$3,700,000
2Sales returns and allowances50,000
3Collections of accounts receivable2,810,000
4Write-offs of accounts receivable deemed noncollectable90,000
5Recovery of bad debts previously written off as noncollectable29,000


  1. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.
  2. Enter the January 1,2019, balances in Accounts Receivable and Allowances for Doubtful Accounts, post the entries to the tow accounts (use T-accounts), and determine the balances.
  3. Prepare the journal entry to record bad dbt expense for 2019, assuming that an aging of accounts receivable indicates that expected bad debts are $115,000.
  4. Compute the accounts receivable turnover for 2019 assuming the expected bad debt information provided in (c).


House Co.
Journal Entries
House Co
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