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maeryll

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  • It's all about Trade and Other Receivable?

    Fiancee company records sales return during the year as a credit to accounts receivable.

    However, at the end of the accounting period, the entity estimates the probable sales return and records the same by means of an allowance account.

    The following transactions occurred in summary form:

    1.Sales of merchandise on account, 2/10, n/30 4,000,000

    2.Collection within the discount period 1,470,000

    3.Collection beyond the discount period 1,000,000

    4.Sales return granted 100,000

    5.Sales return estimated at the end of the year 20,000

    Required:

    Prepare Journal Entries to record the transaction.

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    Prepare one compound entry to reclassify the receivables account.?

    Dreamer company reported the "receivables" account with a debit balance of 2,000,000 at year-end.

    The allowance for doubtful accounts had a credit balance of 50,000 on same date.

    Subsidiary details revealed the following:

    Trade accounts receivable 775,000

    Trade notes receivable 100,000

    Installments receivable, normally due 1 year to two years 300,000

    Customers' accounts reporting credit balances arising from sales return (30,000)

    Advance payments for purchase of merchandise 150,000

    Customers' accounts reporting credit balances arising from advance payment (20,000)

    Cash advance to subsidiary 400,000

    Claims from insurance entity 15,000

    Subscriptions receivable due in 60 days 300,000

    Accrued interest receivable 10,000

    Required:

    Prepare one compound entry to reclassify the receivables account.