On May 31,Cray Has $375,800 of Accounts Receivable

question 27

Essay

On May 31,Cray has $375,800 of accounts receivable.Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250.
1.Prepare journal entries to record the following selected May transactions.The company uses the perpetual inventory system.
a.Sold $415,200 of merchandise (that cost $249,000)to customers on credit.
b.Received $465,800 cash in payment of accounts receivable.
c.Wrote off $15,800 of uncollectible accounts receivable.
d.In adjusting the accounts on May 31,its fiscal year-end,the company estimated that 4.0% of accounts receivable will be uncollectible.
2.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet.

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Definitions:

Quarterly Sales

A measurement of a company's sales revenue generated in a three-month period.

Proximal

Near or close to a point of reference, often used in physical, temporal, or relational contexts.

Distal

Describes something that is situated away from the center or point of reference.

Goal Setting

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives to strive for in personal or professional contexts.