Allowance method entries

The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December $31$:

Date Transaction

January $19.$ Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $$1,700$ cash in full payment of Arlene$$s account.

April $3.$ Wrote off the $$9,740$ balance owed by Premier GS Co$.,$ which is bankrupt.

July $16.$ Received $30\%$ of the $$17,500$ balance owed by Hayden Co$.,$ a bankrupt business, and wrote off the remainder as uncollectible.

November $23.$ Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $$2,770$ cash in full payment.

December $31.$ Wrote off the following accounts as uncollectible $($compound entry$)$: Cavey Co$.,$ $$7,325$; Fogle Co$.,$ $$2,175$; Lake Furniture, $$5,595$; Melinda Shryer, $$1,580.$

December $31.$ Based on an analysis of the $$862,500$ of accounts receivable, it was estimated that $$37,500$ will be uncollectible. Journalized the adjusting entry.

Required:

$1.$ Record the January $1$ credit balance of $$35,700$ in a T account presented below in requirement $2$b for Allowance for Doubtful Accounts.

Question Content Area

$2.$ a$.$ Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December $31$ adjusting entry, assume the $$862,500$ balance in accounts receivable reflects the adjustments made during the year.

DateAccountDebitCredit

Jan. $19$

Jan. $19$

Apr. $3$

July $16$

Nov. $23$

Nov. $23$

Dec. $31$

Dec. $31$

Question Content Area

$2.$ b$.$ Post each entry that affects the following T accounts and determine the new balances:

Allowance for Doubtful Accounts

Transaction Debit amount Transaction Credit amount

fill in the blank $1$ of $18$

fill in the blank $2$ of $18$ Jan. $1$ Balance fill in the blank $3$ of $18$

fill in the blank $4$ of $18$

fill in the blank $5$ of $18$ fill in the blank $6$ of $18$

fill in the blank $7$ of $18$

fill in the blank $8$ of $18$

fill in the blank $9$ of $18$ fill in the blank $10$ of $18$

fill in the blank $11$ of $18$

fill in the blank $12$ of $18$

fill in the blank $13$ of $18$

fill in the blank $14$ of $18$

fill in the blank $15$ of $18$

Dec. $31$ Adjusted Balance fill in the blank $16$ of $18$

Bad Debt Expense

Transaction Debit amount Transaction Credit amount

fill in the blank $17$ of $18$

fill in the blank $18$ of $18$

Question Content Area

$3.$ Determine the expected net realizable value of the accounts receivable as of December $31($after all of the adjustments and the adjusting entry$).$

fill in the blank $1$ of $1$$

$4.$ Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December $31$ had been based on an estimated expense of $(1)/(2)$ of $1\%$ of the sales of $$5,330,000$ for the year, determine the following:

a$.$ Bad debt expense for the year.

fill in the blank $1$ of $1$$

b$.$ Balance in the allowance account after the adjustment of December $31.$

fill in the blank $1$ of $1$$

c$.$ Expected net realizable value of the accounts receivable as of December $31($after all of the adjustments and the adjusting entry$).$

fill in the blank $1$ of $1$$