At the beginning of the current period, Huang Co. had a balance of $100,000 in Accounts Receivable

Question:

At the beginning of the current period, Huang Co. had a balance of $100,000 in Accounts Receivable and a $7,000 credit balance in Allowance for Doubtful Accounts. In the period, it had net credit sales of $400,000 and collections of $361,500. It wrote off accounts receivable of $10,500 as uncollectible. After a $1,750 account was written off as uncollectible, it was subsequently collected. This is in addition to the other cash collections.

Based on an aging schedule, uncollectible accounts are estimated to be $8,000 at the end of the period.

Instructions

(a) Record sales and collections in the period.

(b) Record the write off of uncollectible accounts in the period.

(d) Record the bad debt expense adjusting entry for the period.

(e) Show the balance sheet presentation of the receivables at the end of the period.

(f) What is the amount of bad debt expense on the income statement for the period?

TAKING IT FURTHER

Why is bad debt expense not increased when an account receivable is written off because it is determined to be uncollectible?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...