Entries Related to Uncollectible Accounts

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

Jan.	19	Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,780 cash in full payment of Arlenes account.
Apr.	3	Wrote off the $15,930 balance owed by Premier GS Co., which is bankrupt.
July	16	Received 35% of the $28,600 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible.
Nov.	23	Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,530 cash in full payment.
Dec.	31	Wrote off the following accounts as uncollectible (one entry): Cavey Co., $11,980; Fogle Co., $3,560; Lake Furniture, $9,145; Melinda Shryer, $2,585.
	31	Based on an analysis of the $1,409,900 of accounts receivable, it was estimated that $61,300 will be uncollectible. Journalized the adjusting entry.

Required:

1. Record the January 1 credit balance of $58,400 in a T account presented below in requirement 2b 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 $1,409,900 balance in accounts receivable reflects the adjustments made during the year.

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 e5f244ff2fe4fdf_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 of 1% of the sales of $8,700,000 for the year, determine the following:

a. Bad debt expense for the year. $fill in the blank e5f244ff2fe4fdf_2

b. Balance in the allowance account after the adjustment of December 31. $fill in the blank e5f244ff2fe4fdf_3

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 e5f244ff2fe4fdf_4

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