Reference no: EM133044437

Question - At the beginning of the year, Whitney Company had the following accounts on its books:

Accounts Receivable $154,000 Debit

Allowance for Doubtful Accounts $7,900 Credit

During the year, credit sales were $1,133,000 and collections on account were $1,120,000

The following transactions, among others, occurred during the year:

Feb. 17 Wrote off R. Lowell's account, $3,300

May. 28 Wrote off G. Boyd's account, $2,100

Oct. 13 Received $500 from G. Boyd, who is in bankruptcy proceedings, in final settlement of the account written off on May 28. This amount is not included in the $1,120,000 collections.

Dec. 15 Wrote off K. Marshall's account,$1,400

Dec. 31 In an adjusting entry, recorded the allowance for doubtful accounts at 0.5% 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.