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Mrrafil [7]
3 years ago
15

Charleston, Inc. has Accounts Receivable of $170,000 and an Allowance for Doubtful Accounts of $11,000. If it writes-off a custo

mer account balance of $1,100, what is the amount of its net accounts receivable
Business
1 answer:
Romashka [77]3 years ago
5 0

Answer:

$159,000

Explanation:

The double entry to record the writes off balances which are the bad debts of Customers who will not pay the debt, will include debit to allowance which is decrease in the allowance and credit to accounts receivable which is also a decrease to accounts receivable:

Dr Allowance for doubtful account $1,100

Cr Accounts Receivable                           $1,100

Similarly the increase in Allowance for Doubtful Accounts of $11,000 will be treated totally opposite of the decrease in Allowance for Doubtful Accounts above:

Dr Accounts Receivable               $11,000

Cr Allowance for doubtful account    $11,000

Now, the increase in allowance is deducted from opening accounts receivables and vice versa. The treatment is given below:

Opening balance of Accounts receivables             $170,000

Accounts Receivable                                                ($1,100)

Allowance for Doubtful Debt    ($11,000 - $1,100)   <u>   $9,900 </u>

Accounts Receivable (Net)                                       $159,000

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depreciation expense 200 debit (-net income)

 accumulated depreciation  200 credit (-assets)

b. Sold land that had originally cost $9,000 for $13,000 in cash.

cash 13,000 debit +assets

  land             9,000 credit -assets

 gain on sale 4,000 credit +net income

c. Acquired a new machine under a financing lease. The present value of future lease payments, discounted at 11%, was $11,000.

machinery  11,000 debit +assets

 lease liability 11,000 credit +liability

d. Recorded the first annual payment of $2,800 for the leased machine (in part c).

lease liability 2,800 debit -liability

cash                     2,800 credit -assets

d. Recorded a $5,900 payment for the cost of developing and registering a trademark.

trademark 5,900 debit +assets

cash  5,900 credit -assets

e. Recognized periodic amortization for the trademark (in part e) using a 34-year useful life.

 amortization 173 debit -net income

trademark 173 credit -asset

f. Sold used production equipment for $16,000 in cash. The equipment originally cost $45,000, and the accumulated depreciation account has an unadjusted balance of $23,700. It was determined that a $1,800 year-to-date depreciation entry must be recorded before the sale transaction can be recorded.

book value  45,000 - 23,700 - 1,800 = 19,500

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acc depreciation        23,700 debit +asset

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DEBIT //  CREDIT           DEBIT //  CREDIT

----------------------          ---------------------------------

+++++   //  --------             ------- ///    +++++++

Left side increase fro mdebit and decrease from credit

right side increase through credit decrease with debit.

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