Answer:
Prepare journal entries of sales, collections, write offs of accounts receivable, and reverse entries:
Date Account details and explanations Debit Credit
Accounts receivable 944,000
sales revenue 944,000
Allowance for doubtful accounts 5300
Accounts receivable 5300
Accounts receivable 1800
Allowance for doubtful accounts 1800
cash 1800
Accounts receivable 1800
Calculating the ending balance of accounts receivable and unadjusted ending balance of allowance for doubtful accounts:
particulars Amount ($)
beginning balance of accounts receivable 139,000
Add: Net credit sales 944,000
less : Collections 908,000
Write-offs 5,300
Add: Reinstated amount 1800
less: Collections 1800
Ending balance of accounts receivable 169700
particulars Amount ($)
beginning balance of doubtful accounts 11,370
less : Write-offs 5300
Add: Reinstated amount 1800
Ending balance of unadjusted balance 7870
allowance of doubtful accounts
Preparing journal entry to record bad debt
Date Account details and explanations Debit Credit
Bad debt expense ( 169700*8%) - 7870 12789
allowance of doubtful accounts 12789
