Answer:
- Dec. 31. Based on an analysis of the $832,600 of accounts receivable, it was estimated that $36,200 will be uncollectible. Journalize the adjusting entry.
Dr Bad Debt Expense $ 66,735
Cr Allowance for Uncollectible Accounts $ 66,735
Explanation:
Jan. 19. Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible.
Journalize the receipt of $1,645 cash in full payment of Arlene’s account.
Dr Accounts receivable $ 1,645
Cr Allowance for Uncollectible Accounts $ 1,645
Dr Cash $ 1,645
Cr Accounts receivable $ 1,645
Apr. 3. Wrote off the $9,430 balance owed by Premier GS Co., which is bankrupt.
Dr Allowance for Uncollectible Accounts $ 9,430
Cr Accounts receivable $ 9,430
July 16. Received 45% of the $16,900 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible.
Dr Cash $ 7,605
Cr Accounts receivable $ 7,605
Dr Allowance for Uncollectible Accounts $ 9,295
Cr Accounts receivable $ 9,295
Nov. 23. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $2,680 cash in full payment.
Dr Accounts receivable $ 2,680
Cr Allowance for Uncollectible Accounts $ 2,680
Dr Cash $ 2,680
Cr Accounts receivable $ 2,680
Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $7,090 ; Fogle Co., $2,105 ; Lake Furniture, $ 5,410 ; Melinda Shryer, $1,530.
Dr Allowance for Uncollectible Accounts $ 16,135
Cr Accounts receivable Cavey Co $ 7,090
Cr Accounts receivable Fogle Co $ 2,105
Cr Accounts receivable Lake Furniture $ 5,410
Cr Accounts receivable Melinda Shryer $ 1,530
BALANCE
Dr Allowance for Uncollectible Accounts $ 30,535
Dec. 31. Based on an analysis of the $832,600 of accounts receivable, it was estimated that $36,200 will be uncollectible. Journalize the adjusting entry.
Dr Bad Debt Expense $ 66,735
Cr Allowance for Uncollectible Accounts $ 66,735
If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % of estimated value.
Because the company already has a DEBIT balance in the Allowance for Doubtful Accounts it's necessary to register an entry that compensate the existing value and reflect the value as % of account receivable.
