Chapter $8$ Homework i

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E$8-5($Algo$)$ Determining Financial Statement Effects of Write$-$Offs and Recoveries $[$LO $8-2]$

Prior to recording the following, Elite Electronics, Incorporated, had a credit balance of $$3,400$ in its Allowance for Doubtful Accounts.

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References

a$.$ On August $31,$ a customer balance for $$440$ from a prior year was determined to be uncollectible and was written off.

b$.$ On December $15,$ the customer balance for $$440$ written off on August $31$ was collected in full.

Required:

For each transaction listed above, indicate the amount and direction $(+$ or $-)$ of effects on the financial statement accounts and on the overall accounting equation. Hint: On December $15$th$,$ first reinstate the Accounts receivable and then record the collection of cash. $($Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.$)$

$\backslash$table$[[,$Assets,$=,$Liabilities,$+,$Stockholders' Equity$],[$a$.,,=,,+,],[$a$.,,=,,+,],[$b$(1),,=,,+,],[$b$(1),,=,,+,],[$b$(2),,=,,+,],[$b$(2),,=,,+,]]$