An analysis of the accounts receivable balance of $8 702 on the records of Jorgenson Inc. on

QUESTION

An analysis of the accounts receivable balance of $8,702 on the records of Jorgenson, Inc., on December 31 reveals the following:Accounts from sales of last 3 months(appear to be fully collectible)$7,460Accounts from sales prior to October 11,312(of doubtful value) 320Accounts known to be worthlessDishonored notes charged back to customers accounts800Credit balances in customers accounts1,190(a) What adjustments are required?(b) How should the various balances be shown on the balance sheet?
Answer A Accounts from sales prior to October 1 (of doubtful value) will be classified as allowance for doubtful accounts and will be deducted from accounts Receivables Accounts known to be worthless will be classified as bad debt expense and will be deducted from Accounts Receivables Dishonored notes charged back to customers accountswill be added back to the Accounts Receivables Credit balances in customers accounts will be deducted from the Accounts Receivables as having the

e head Answer B Balance Sheet presentation Accounts Receivables(Gross) $ 8,702 less: Allowance for doubtful accounts $ (1,312) less: Accounts known to be worthless $ (320) add: Dishonored notes charged back to customers accounts $ 800 less: Credit balances in customers accounts $ (1,190) Accounts Receivables(Net) $ 6,680

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