Question

G On January 1, 2019, Joe's Cellphones had a debit Accounts Receivable balance of $ 150 000 and a credit balance in Allowance for doubtful accounts of $30 000. . During 2019, it had the following selected transactions: January 2 Sold on account $ 100 000 of merchandize to Fanzi. Cost of the goods sold: $50 000 January 30: Fanzi paid only $80 000 of his account receivable March 30: After repeated attempts to collect, Joe's wrote off its Account Receivable from Fanzi December 1: Joe's received a $20 000 cheque from Fanzi with his apologies for the late payment. December 31: Using the aging-of-accounts receivable, Joe's estimates its uncollectible accounts $ 40 000 . REQUIRED Journalize the Joe's Cell Phones transactions including the adjustment of the bad debt of December 31, 2019

Answer 1

Solution:
	Journal entries
Date	Account titles & explanations	Debit	Credit
2-Jan	Accounts Receivable	$100,000
	Sales		$100,000
	(Being Merchandise sold on account)
2-Jan	Cost of goods sold	$50,000
	Merchandise Inventory		$50,000
	(Being Cost of goods sold recorded)
30-Jan	Cash	$80,000
	Accounts Receivable		$80,000
	(Being Cash received against sales)
30-Mar	Allowance for Doubtful Accounts	$20,000
	Accounts Receivable		$20,000
	(Being amount wrote off)
1-Dec	Accounts Receivable	$20,000
	Allowance for Doubtful Accounts		$20,000
	(Being amount received against wrote off)
1-Dec	Cash	$20,000
	Accounts Receivable		$20,000
	(Being cash received against uncollectable)
31-Dec	Bad debt expense	$10,000
	Allowance for Doubtful Accounts		$10,000
	(Being bad debt expense recorded)
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