The following balances are taken from the unadjusted trial balance of Sperling Corp. at its year-end, December 31, 2015:
An ageing of accounts receivable at December 31, 2015 reveals the following information:
The balance for J. Nelson of $2,000 is over 90 days past due. It is included in the ageing of accounts receivable chart and has not yet been written off.
Part A: 2015
Required: Prepare journal entries to record:
- The write-off of J. Nelson’s account on December 31, 2015
- The appropriate adjusting entry to set up the required balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2015. (Hint: Remember that J. Nelson’s account has been written off.)
Part B: 2016
The following transactions were made in 2016:
|
a. |
Sales on account were $1,400,000. |
|
b. |
Collections of accounts receivable amounted to $1,198,000. |
|
c. |
Sperling wrote off $20,000 of accounts receivable. |
|
d. |
An ageing of accounts receivable at December 31, 2016 revealed the following information: |
Required: Prepare the journal entries required for parts a. through d. and the entry necessary to adjust the Allowance for Doubtful Accounts general ledger account balance at December 31, 2016.
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