Example 1

. On May 31, a company had a balance in its accounts

receivable of $103,895. Prepare journal entries to
record the following transactions for June.
 Example 2
Tecom had net sales of $315,000 and average accounts
receivable of $75,600. Its competitor, ZCom, had net
sales of $299,000 and average accounts receivables of
$81,350. Calculate the accounts receivable turnover for
both companies. Which company is doing a better job
of managing its accounts receivables?
 Solution
 Feedback: Tecom: $315,000/$75,600 = 4.2 times
ZCom: $299,000/$81,350 = 3.7 times
Tecom has a higher accounts receivable turnover. This
implies it is doing a better job of managing its
receivables than ZCom.
 Example 3
The Connecting Company uses the percent of sales method of
accounting for uncollectible accounts receivable. During the
current year, the following transactions occurred:

1. Prepare the general journal entries to record these transactions.

2. If the balance of the allowance for uncollectible accounts was $8,000 on January 1 of
the current year, determine the balance of the allowance for uncollectible accounts at
December 31 of the current year. Assume that the transactions above are the only
transactions affecting the allowance for uncollectible accounts during the year.
 Solution

2. Calculation: $8,000 - $8,100 - $2,500 + $6,000 + $9,500 = $12,900

 Example 4
Prepare general journal entries for the following transactions
of Viking Company, assuming they use the allowance
method to account for uncollectible accounts