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Journal Entries and Balance Sheets Guide

This document contains 4 questions regarding accounting for accounts receivable. Question 1 provides transactions for a company during its first year of operations and asks to record journal entries. Question 2 provides additional transactions for a company and asks to record journal entries and prepare adjusting and closing entries and a year-end balance sheet. Question 3 provides a similar set of transactions for another company. Question 4 repeats the transactions from Question 2.

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Hammna Ashraf
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23 views2 pages

Journal Entries and Balance Sheets Guide

This document contains 4 questions regarding accounting for accounts receivable. Question 1 provides transactions for a company during its first year of operations and asks to record journal entries. Question 2 provides additional transactions for a company and asks to record journal entries and prepare adjusting and closing entries and a year-end balance sheet. Question 3 provides a similar set of transactions for another company. Question 4 repeats the transactions from Question 2.

Uploaded by

Hammna Ashraf
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

No. Q No. Page No.

1 8-2 390
2 8-4 390
3 8-5 391
4 8A-2 393

Q No.1
Ahmed completed following transactions during first year of operation.

Credit sales during year Rs.500,000


Cash sales Rs.125,000
Collection from customer Rs.375,000
Sales return( assumed on credit) Rs.10,000
Company estimate 5% bad debts on ending A/c Receivable balance.
Required:
 Pass journal entries for above transactions.
 Pass adjusting and closing entries
 Show balance sheet at the end of year.

Q No.2
Company estimate allowance for bad debts at 5% of year end A/c Receivable balance.
A/c Receivable on Jan 1,2005 Rs.100,000 and allowance for bad debts showed a credit
balance of Rs.4200. During the year 2005 following transactions were completed.

Total sales (including cash sales Rs.50,000) Rs.400,000


Sales return and allowances Rs.10,000
Sales discount Rs.5000
One customer account showing balance of Rs.7500 from which he is unable to pay
Rs.2500 and balance amount paid by him, company decided to close his account.
Cash collected from customer account Rs.335,000
One customer whose account had been written off in 2003 now paid Rs.500.
Required:
 Pass journal entries for above transactions.
 Pass adjusting and closing entries
 Show balance sheet at the end of year

Q No.3
Zafar enterprises provided following information for the year 2005.
A/c Receivable on Jan 1,2005 Rs.100,000
Allowance for bad debts on Jan 1, 2005 5000

Transactions during the year are as follows:


 Sales during the year Rs.550,000 including cash sales of Rs.50,000.
 Collections during the year Rs.400,000.
 Customer account written off Rs.3000
 One customer paid 40% of his account balance and remainder was considered
worthless. Total amount due on customer was Rs.4000.
 Firm estimated bad debts 5% of year end A/c Receivable balance.
Required:
As given in Q No.2

Q No.4
Company estimate allowance for bad debts at 5% of year end A/c Receivable balance.
A/c Receivable on Jan 1,2005 Rs.100,000 and allowance for bad debts showed a credit
balance of Rs.4200. During the year 2005 following transactions were completed.

Total sales (including cash sales Rs.50,000) Rs.400,000


Sales return and allowances Rs.10,000
Sales discount Rs.5000
One customer account showing balance of Rs.7500 from which he is unable to pay
Rs.2500 and balance amount paid by him, company decided to close his account.
Cash collected from customer account Rs.335,000
One customer whose account had been written off in 2003 now paid Rs.500.
Required:
 Pass journal entries for above transactions.
 Pass adjusting and closing entries
 Show balance sheet at the end of year

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