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At January 1, 2024, Covington Inc. reported the following information on its statement of financial position Accounts receivable Allowance for expected credit losses During 2024, the company had the following summary transactions for receivables: Sales on account, $1,680,000; cost of goods sold, $1,008,000; return rate of 5% Selling price of goods returned, $96,000; cost of goods returned to inventory. $57,600 Collections of accounts receivable, $1,500,000 Write-offs of accounts receivable deemed uncollectible, $47,000 Collection of accounts previously written off as uncollectible, $13,000 After considering all of the above transactions, total estimated uncollectible accounts, $32,000 1. 2. 3. 4. 5. 6. Prepare T accounts for Accounts Receivable and Allowance for Expected Credit Losses, (2) enter the opening balances, (3) p e above summary entries, and (4) determine the ending balances. (Post entries in the order of journal entries presented in the evious part.) Bal. (1) (5) Bal v Accounts Receivable 500,000 $500,000 44,000 1680000 13000 47000 (2) (3) (4) (5) Allowance for Expected Credit Losses Bal (5) 96000 1500000 47000 13000 1656000 44000 13000

At January 1, 2024, Covington Inc. reported the following information on its statement of financial position Accounts receivable Allowance for expected credit losses During 2024, the company had the following summary transactions for receivables: Sales on account, $1,680,000; cost of goods sold, $1,008,000; return rate of 5% Selling price of goods returned, $96,000; cost of goods returned to inventory. $57,600 Collections of accounts receivable, $1,500,000 Write-offs of accounts receivable deemed uncollectible, $47,000 Collection of accounts previously written off as uncollectible, $13,000 After considering all of the above transactions, total estimated uncollectible accounts, $32,000 1. 2. 3. 4. 5. 6. Prepare T accounts for Accounts Receivable and Allowance for Expected Credit Losses, (2) enter the opening balances, (3) p e above summary entries, and (4) determine the ending balances. (Post entries in the order of journal entries presented in the evious part.) Bal. (1) (5) Bal v Accounts Receivable 500,000 $500,000 44,000 1680000 13000 47000 (2) (3) (4) (5) Allowance for Expected Credit Losses Bal (5) 96000 1500000 47000 13000 1656000 44000 13000

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...
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At January 1, 2024, Covington Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for expected credit losses A During 2024, the company had the following summary transactions for receivables: Sales on account, $1,680,000; cost of goods sold, $1,008,000; return rate of 5% Selling price of goods returned, $96,000; cost of goods returned to inventory, $57,600 Collections of accounts receivable, $1,500,000 Write-offs of accounts receivable deemed uncollectible, $47,000 Collection of accounts previously written off as uncollectible, $13,000 After considering all of the above transactions, total estimated uncollectible accounts, $32,000 1. 2. 3. 4. 5. 6. (1) Prepare T accounts for Accounts Receivable and Allowance for Expected Credit Losses, (2) enter the opening balances, (3) post the above summary entries, and (4) determine the ending balances. (Post entries in the order of journal entries presented in the previous part.) Bal (1) (5) Bal. v (4) Accounts Receivable 500,000 $500,000 44,000 1680000 13000 47000 (2) (3) (4) Y (5) Allowance for Expected Credit Losses Bal. (5) JAY Y 96000 1500000 47000 13000 1656000 44000 13000 2000
Transcribed Image Text:At January 1, 2024, Covington Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for expected credit losses A During 2024, the company had the following summary transactions for receivables: Sales on account, $1,680,000; cost of goods sold, $1,008,000; return rate of 5% Selling price of goods returned, $96,000; cost of goods returned to inventory, $57,600 Collections of accounts receivable, $1,500,000 Write-offs of accounts receivable deemed uncollectible, $47,000 Collection of accounts previously written off as uncollectible, $13,000 After considering all of the above transactions, total estimated uncollectible accounts, $32,000 1. 2. 3. 4. 5. 6. (1) Prepare T accounts for Accounts Receivable and Allowance for Expected Credit Losses, (2) enter the opening balances, (3) post the above summary entries, and (4) determine the ending balances. (Post entries in the order of journal entries presented in the previous part.) Bal (1) (5) Bal. v (4) Accounts Receivable 500,000 $500,000 44,000 1680000 13000 47000 (2) (3) (4) Y (5) Allowance for Expected Credit Losses Bal. (5) JAY Y 96000 1500000 47000 13000 1656000 44000 13000 2000
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