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Smith Ltd

Accounting

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Smith Ltd. was in the process of preparing year-end adjusting entries for the year ended December 31, 2018. Smith Ltd. had the following balance in their books (ledger):

 

Dr. Cr.

      Accounts Receivable $91,000

 

      Allowance for Sales Discounts $4,500

      Allowance for Sales Returns 3,300

      Allowance for doubtful accounts 12,200

 

Additional Information:

      

o Total Credit Sales during 2018:   $66,000

 

The Company estimated the following for the year-end December 31, 2018 purposes:

      Expected Sales discount $3,500

      Expected Sales returns 4,100

      Accounts receivable should be written off 4,400

 

      Using percentage of credit sales method, the company estimated 10% of the credit sales might NOT be collected

 

Required: 

a) Prepare the year-end entries for the above that are related to accounts receivable

b) Calculate the amount that would be displayed on SFP for net accounts receivable