Reference no: EM132696441

Examine the following transaction:

Dr. Accounts Receivable 2,000

Cr. Allowance for Doubtful Accounts 2,000

Dr. Cash 2,000

Cr. Accounts Receivable 2,000

Problem 1: What would be an appropriate journal entry description for this transaction?

Problem 2: Based on the following transactions, prepare the necessary journal entries.

a. During the first year of its business, Cougar Corp. sold services totaling $450,000 were sold on credit.

b. During the first year, Cougar Corp. collected $380,000 in cash for the credit sales made during the year.

c. During the first year, Cougar Corp. properly wrote off $7,000 of its accounts receivable as they were deemed uncollectible.

d. Assume that Cougar Corp. estimates bad debts using the percent-of-receivables method. Cougar Corp. did analysis and has estimated that 10% of their accounts receivable are uncollectible.