Question

At the beginning of the current period, Kingbird Corp. had balances in Accounts Receivable of $191,500 and in Allowance for Doubtful Accounts of $9,890 (credit). During the period, it had net credit sales of $733,600 and collections of $767,780. It wrote off as uncollectible accounts receivable of $7,149. However, a $2,957 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $25,440 at the end of the period. (Omit cost of goods sold entries.)(a - d) (a) Prepare the entries to record sales and collections during the period. (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (c) Prepare the entries to record the recovery of the uncollectible account during the period (d) Prepare the entry to record bad debt expense for the period

Answer 1

Answer:

Journal entries

Explanation:

The journal entries are as follows

a. Account receivable $733,600

               To sales revenue $733,600

(Being the sales is recorded)

Cash Dr $767,780

         To Account receivable $767,780

(Being the collection is recorded)

b. Allowance for doubtful debts $7,149

            To Account receivable $7,149

(Being the written off amount is recorded)

c. Account receivable $2,957

            To  Allowance for doubtful debts $2,957

(Being the previously written off as uncollectible is recorded)

Cash Dr $2,957

        To Account receivable $2,957

(Being the recovery is recorded)

d. Bad debt expense $19,742

         To Allowance for doubtful debts $19,742

(Being the bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= Opening balance of Allowance for Doubtful Accounts - written off amount + recovery amount - uncollectible amount

= $9,890 - $7,149 + $2,957 - $25,440

= $19,742