Accounting for Receivables—Journal Entries

Accounting for Receivables—Journal Entries

The following transactions affecting the accounts receivable of Wonderland Corporation took place during the year ended January 31, 2008:

Sales (cash and credit)	$591,050
Cash received from credit customers, all of whom took advantage of the
discount feature of the corporation’s credit terms 4/10, n/30	303,800
Cash received from cash customers	210,270
Accounts receivable written off as worthless	$ 5,250
Credit memoranda issued to credit customers for sales returns and allowances	63,800
Cash refunds given to cash customers for sales returns and allowances	13,318
Recoveries on accounts receivable written off as uncollectible in prior periods
(not included in cash amount stated above)	8,290

The following two balances were taken from the January 31, 2007, balance sheet.

Accounts Receivable	$95,842
Allowance for Bad Debts	9,740 (credit)

The corporation provides for its net uncollectible account losses by crediting Allowance for Bad Debts for 1.5% of net credit sales for the fiscal period.

Instructions:

1. Prepare the journal entries to record the transactions for the year ended January 31, 2008.

2. Prepare the adjusting journal entry for estimated uncollectible accounts on January 31, 2008.

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