At the beginning of the year, the Dallas Company had the following accounts on its books: Accounts Receivable $264,000 Debit Allowance for Doubtful Accounts $16,500 Credit During the year, credit sales were $2,346,000 and collections on account were $2,350,000. The following transactions, among others, occurred during the year: Feb.17 Wrote off R. St. John’s account, $7,500 May.28 Wrote off G. Herberger’s account, $4,800 Oct.13 Received $1,200 from G. Herberger, who is in bankruptcy proceedings, in final settlement of the account written off on May 28. This amount is not included in the $2,350,000 collections. Dec.15 Wrote off R. Clancy’s account, $5,000 Dec.31 In an adjusting entry, recorded the allowance for doubtful accounts at 0.8% of credit sales for the year. Required a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.

Explanation:

Requirement :

DateAccount title and Explanation      Debit                      Credit

Dec.31   Accounts receivable                $2,346,000  

           Sales revenue                                                $2,346,000

[To record credit sales for the year]      

Dec.31Cash                                    $2,350,000  

          Accounts receivable                                    $2,350,000

[To record collections on account for the year]      

Feb.17Allowance for doubtful account    $7,500  

           Accounts receivable-R.St. John               $7,500

[To write off R. St. John's account]      

May 28Allowance for doubtful account   $4,800  

          Accounts receivable-G. Herberger               $4,800

[To write off G. Herberger's account]      

Oct 13Accounts receivable-G. Herberger$1,200  

            Allowance for doubtful account                 $1,200

[To reinstate G. Herberger's account for partil recovery]      

Oct 13Cash                                                  $1,200  

              Accounts receivable-G. Herberger          $1,200

[To record collection from G. Herberger]      

Dec 15Allowance for doubtful account$5,000  

                Accounts receivable-R. Clancy                 $5,000

[To write-off R. Clancy's account]      

Dec 31Bad debt expense [$2,346,000 x 0.8%]$18,768  

                Allowance for doubtful account                  $18,768

[To record allowance for doubtful accounts]  

Requirement b:

Accounts Receivable$242,700

Less: Allowance for Doubtful accounts$19,168

Accounts receivable net$223,532

Calculations:

T-Accounts

Accounts receivable              Allowance for doubtful account

$264,000 Beg.                                    $16,500 Beg.

$2,346,000          $2,350,000  $7,500             $1,200

$1,200                       $7,500      $4,800                 $18,768

                               $4,800  $5,000  

                                $1,200    

                                 $5,000    

                                   $242,700 End.                 $19,168 End.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.