Assume that all of Thurmond Company's sales are credit sales. It has been the practice of

Thurmond Company to provide for uncollectible accounts expense at the rate of one-half of

one percent of net credit sales. For the year 20X1 the company had net credit sales of

$2,021,000 and the Allowance for Doubtful Accounts account had a credit balance, before

adjustments, of $630 as of December 31, 20X1. During 20X2, the following selected

transactions occurred:

Jan. 20 The account of H. Scott, a deceased customer who owed $325, was determined

to be uncollectible and was therefore written off.

Mar. 16 Informed that A. Nettles, a customer, had been declared bankrupt. His

account for $898 was written off.

Apr. 23 The $906 account of J. Kenney & Sons was written off as uncollectible.

Aug. 3 Wrote off as uncollectible the $750 account of Clarke Company.

Oct. 20 Wrote off as uncollectible the $1,130 account of G. Michael Associates.

Oct. 27 Received a check for $325 from the estate of H. Scott. This amount had been

written off on January 20 of the current year.

Dec. 20 Cater Company paid $7,000 of the $7,500 it owed Thurmond Company.

Since Cater Company was going out of business, the $500 balance it still

owed was deemed uncollectible and written off.

REQUIRED: Prepare journal entries for the December 31, 20X1, and the seven

20X2 transactions on the work sheets provided at the back of this unit. T-accounts are also provided for your use in answering these questions.

8. Which one of the following entries should have been made on December 31, 20X1?

A. Uncollectible Accounts Expense 9,475

Allowance for Doubtful Accounts 9,475

B. Uncollectible Accounts Expense 10,105

Allowance for Doubtful Accounts 10,105

C. Allowance for Doubtful Accounts 9,475

Uncollectible Accounts Expense 9,475

D. Allowance for Doubtful Accounts 10,105

Uncollectible Accounts Expense 10,105

9. The balance in the Allowance for Doubtful Accounts account after all 20X2 transactions

have been posted but prior to final adjustment is

A. $5,921. C. $6,551.

B. $6,226. D. $7,051.