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Homework answers / question archive / • Aardvark Company sells merchandise only on credit
• Aardvark Company sells merchandise only on credit. For the year ended December 31, 2019, the following data are available: Sales (all on credit) $1,200,000 Accounts Receivable, January 1, 2019 225,000 Allowance for doubtful accounts, January 1, 2019 (credit) 15,000 Cash collections during 2019 1,050,000 Accounts written off as uncollected (default) during 2019- 10,000 ·A) Determine the balance of Accounts Receivable at December 31, 2019. B) Assume that the company estimates bad debts at 2% of credit sales. What amount will the company record as bad debt expense for 2019? .) What journal entry would Aardvark prepare to record bad debt expense for 2019 (related to part B)? -
| A) | Accounts Receivable | |||||||
| BB | 225,000 | Cash | 1,050,000 | |||||
| Sales | 1,200,000 | written off | 10,000 | |||||
| End bal | 365,000 | |||||||
| Bal of A/R at December 31,2019 | 365,000 | answer | ||||||
| B) | Estimated bad debts | |||||||
| 1,200,000*2% | ||||||||
| 24000 | Answer | |||||||
| C) | Date | Account Titles and Explanation | Debit | Credit | ||||
| 12/31/2019 | Bad debts expense | 24000 | ||||||
| Allowance for doubtful accounts | 24000 | |||||||
