Solon Co. had the following balances at January 1: Accounts Receivable $67000 Positive asset (debit) Allowance for Uncollectible Accounts $8200 Negative asset (credit) Note that at this point, each account has a normal balance. (Assets are normal debit balances, Accounts Receivable is an asset. The allowance for uncollectible accounts is a contra-asset so it has a normal credit balance.) The following transactions occurred during January: 1. Solon sold $560000 of merchandise on credit (on account)
2. Solon collected $380000 from customers on account.
3. Solon wrote-off $5400 of uncollectible accounts.
Record the transactions in accounts or the accounting equation.
The solution will use the equation approach and also show you the solution in t-accounts. Don't forget the beginning balances. Then answer the following questions:
1. What is the balance in Accounts Receivable after these transactions? Put a number (no negative signs) in the first box and the word debit or credit in the second box. (It is a debit if it is a positive asset, a credit if it is a negative asset.)
2. What is the balance in the Allowance for Uncollectible Accounts after these transactions?