In Its First Year of Operations,20X2,Flow Crafts,Inc

question 53

Essay

In its first year of operations,20X2,Flow Crafts,Inc.,had credit sales of $420,000 to many different customers.Of this amount,P.Walker purchased $400 and J.Jocke purchased $180 on account.During the year,cash collections of $389,000 were made,of which P.Walker paid $360 and J.Jocke paid $60.At the end of 20X2,bad debts expense was estimated to be 5% of ending accounts receivable.At December 31,20X2,the Allowance for Uncollectible Accounts is $0.On February 23,20X3,the balance in J.Jocke's account was written off as uncollectible.
Prepare the appropriate journal entry on the books of Flow Crafts,Inc.for
a.the $420,000 in credit sales.
b.the collection of $389,000 from credit customers.
c.the estimation of bad debts expense.
d.the write-off of J.Jocke's account.

---

Definitions:

Breach of Contract

A violation of any of the agreed-upon terms and conditions of a binding contract, which may result in legal action or damages.

Injured Party

An injured party is a person or entity that has suffered harm, loss, or injury, either physically or in a more abstract sense, such as financially, and may be entitled to compensation or redress.

Remedy

A legal solution or compensation awarded to an aggrieved party in a judicial proceeding.

Breach of Contract

The failure, without legal excuse, to perform any promise or obligation outlined in a contract.