Answer to Question #326735 in Accounting for Hana

Question

Peace Ltd, a chair manufacturing company, uses the allowance method of accounting for uncollectible accounts receivable. Transactions during the year:

(1)                      5^th Jan              Sold goods @$2,000 on credit to Mr A (originally cost $1,400)

(2)                      8^th Jan              Accepted a 60-day, 10% note for $2,000 from Mr A on account

(3)                      20^th Jan   wrote off a $1,250 account from Open Co as bad debt

(4)                      5^th Feb               Received from Mr A the amount due on his note of 8^th Jan

(5)                      14^th Feb            Reinstated the account of Open Co and recovered $1,000 in cash

(6)                      24^th Feb            Sold goods @$10,000 on credit to Mr B (originally cost $7,700)

(7)                      28^th Feb            It is estimated that 15% of the credit sales on 24^th Feb will be uncollectible

 

Journalise the transactions given that the accounting period is set at monthly

Answer 1

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