Transactions and Entries in Sunland Company's Balance Sheet
Collection of Accounts Receivable
Transaction: Accounts receivable of $147,000 were collected, including accounts of $64,400 on which 2% sales discount was allowed.
Entry: Debit Cash account for $144,560, Credit Accounts receivable account for $147,000, Credit Sales discount account for $2,940.
Receipt from Written-off Account
Transaction: $5,620 was received in payment of an account that was previously written off in 2024.
Entry: Debit Accounts receivable account for $5,620, Credit Allowance for doubtful accounts for $5,620.
Write-off of Customer Accounts
Transaction: Customer accounts amounting to $26,500 were written off during the year.
Entry: Debit Allowance for doubtful accounts for $26,500, Credit Accounts receivable account for $26,500.
Adjustment of Allowance for Doubtful Accounts
Transaction: At year-end, the allowance for doubtful accounts needed an estimated balance of $26,900 based on an analysis of aged accounts receivable.
Entry: Debit Bad debt expense account for $600, Credit Allowance for doubtful accounts for $600.
These entries are essential in reflecting the transactions in Sunland Company's balance sheet. Each entry ensures that the company's financial records accurately portray the collection of accounts receivable, receipt from a written-off account, write-off of customer accounts, and adjustment of the allowance for doubtful accounts.