Stern Corporation (A)

1. Sales on account during 2010 amounted to $9,965,575

Dat Particulars JF Amount Amount

e
Accounts receivables A/c Dr. 9965575
To Sales A/c 9965575
(Being sales done on credit)
2. Payment received on accounts receivable during 2010 totaled
$9,685,420

Date Particulars JF Amount Amount

Cash A/c Dr. 9685420
To Accounts receivables A/c 9685420
(Being cash received from debtors)
3. During the year, accounts receivable totaling $26,854 were deemed
uncollectible and were written off

Date Particulars JF Amount Amount

Allowances for doubtful debts A/c Dr. 26854
To Accounts receivables A/c 26854
(Being uncollectible accounts receivables
written off as doubtful)
4. Two accounts written off as uncollectible in 2009 were collected in
2010. One account for $2,108 was paid in full. A partial payment of
$1,566 was made by the Hollowell Company on another account that
originally had amounted to $2,486. The controller was reasonably sure
this account would be paid in full
Date Particulars JF Amount Amount
Cash A/c Dr. 2108
To Allowances for doubtful debts A/c 2108
(Being cash collected for doubtful accounts
receivables)
Cash A/c Dr. 1566
To Allowances for doubtful debts A/c 1566
(Being cash collected for doubtful accounts
receivables)
Accounts receivables A/c Dr. 920
To Allowances for doubtful debts A/c 920
(Being remaining amount to be received from
Hollowell company)
 Account receivables Account
Date Particulars LF Amount Date Particulars L Amount
F
To opening balance 988257 By cash 9685420
(from exhibit)
To sales 9965575 By allowances for 26854
doubtful debts
To allowances for 920
doubtful debts
By closing balance 1242478
Total 10954752 Total 10954752
5. The Allowance for Bad Debts was adjusted to equal 3 percent of the balance in Accounts
Receivable at the end of the year
Allowances for Doubtful Debts Account
Date Particulars LF Amount Date Particulars LF Amount
To Accounts 26854 By opening balance 29648
receivables (from exhibit)
By cash 2108
By cash 1566
By Accounts 920
receivables
To closing balance 37274.34 By Profit and loss 29886.34
(1242478*3%) account (bad debts
expense)
Total 64128.34 Total 64128.34

Date Particulars JF Amount Amount

Profit and Loss A/c Dr. 29886.34
To Allowances for doubtful debts A/c 29886.34
(Being allowances for doubtful debts account
created)
Q.2 Give the correct totals for Accounts Receivable and the Allowance
for Doubtful Accounts as of December 31, 2010, after the
transactions affecting them had been recorded

Particulars Amount

Accounts receivables account 1242478

(-) Allowances for doubtful debts account (37274.34)

Total 1205203.66