Entries Related to Uncollectible Accounts

The following transactions were completed by The Spencer Gallery during the current fiscal year ended December 31: Mar. 15. Reinstated the account of Brad Atwell, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1,650 cash in full payment of Brads account. May 20. Wrote off the $9,450 balance owed by Glory Rigging Co., which is bankrupt. Aug. 13. Received 30% of the $17,000 balance owed by Coastal Co., a bankrupt business, and wrote off the remainder as uncollectible. Sept. 2. Reinstated the account of Lorie Kidd, which had been written off two years earlier as uncollectible. Recorded the receipt of $2,690 cash in full payment. Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Kimbro Co., $7,110; McHale Co., $2,110; Summit Furniture, $5,430; Wes Riggs, $1,535. Dec. 31. Based on an analysis of the $837,200 of accounts receivable, it was estimated that $36,400 will be uncollectible. Journalized the adjusting entry.

Required:

1. Record the January 1 credit balance of $34,700 in a T account (below) for Allowance for Doubtful Accounts.

2. a.Journalize the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $837,200 balance in accounts receivable reflects the adjustments made during the year.

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

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