Transactions and Entries in Sunland Company's Balance Sheet

What are the transactions and entries that occurred in Sunland Company's balance sheet? How are these transactions reflected in the accounting records?

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.

← Consumer and producer surplus let s calculate the surplus benefits Spring company s financial status assets equity and liabilities →