Lopez Company Jounal - 71009

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  • Posted on: Mon 04 Aug, 2014
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Lopez Company began operations on January 1, 2010, and it estimates uncollectible accounts using the allowance method. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows.

 

  

 

2010

 

a.Sold $1,350,500 of merchandise (that had cost $979,900) on credit, terms n/30.

 

b.Wrote off $18,600 of uncollectible accounts receivable.

 

c.Received $669,600 cash in payment of accounts receivable.

 

d.In adjusting the accounts on December 31, the company estimated that 2.50% of accounts receivable will be uncollectible.

 

  

 

2011

 

e.Sold $1,563,600 of merchandise (that had cost $1,294,500) on credit, terms n/30.

 

f.Wrote off $27,500 of uncollectible accounts receivable.

 

g.Received $1,192,700 cash in payment of accounts receivable.

 

h.In adjusting the accounts on December 31, the company estimated that 2.50% of accounts receivable will be uncollectible.

 

  

 

Required:Prepare journal entries to record Lopez’s 2010 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system.) (Round your intermediate calculations to the nearest dollar amount.)

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