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 $2,150 cash in full payment of Arlenes account.
Apr.	3	Wrote off the $12,320 balance owed by Premier GS Co., which is bankrupt.
July	16	Received 25% of the $22,100 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 $3,505 cash in full payment.
Dec.	31	Wrote off the following accounts as uncollectible (one entry): Cavey Co., $9,265; Fogle Co., $2,750; Lake Furniture, $7,075; Melinda Shryer, $2,000.
	31	Based on an analysis of the $1,092,500 of accounts receivable, it was estimated that $47,500 will be uncollectible. Journalized the adjusting entry.

Required:

1. Record the January 1 credit balance of $45,200 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.

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 $1,092,500 balance in accounts receivable reflects the adjustments made during the year.

Jan. 19-reinstate	Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseInterest ReceivableSales	- Select -	- Select -
	Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseInterest ReceivableSales	- Select -	- Select -
Jan. 19-collection	Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseCashSales	- Select -	- Select -
	Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseCashSales	- Select -	- Select -
Apr. 3	Accounts Receivable-Premier GS Co.Allowance for Doubtful AccountsBad Debt ExpenseNotes ReceivableSales	- Select -	- Select -
	Accounts Receivable-Premier GS Co.Allowance for Doubtful AccountsBad Debt ExpenseNotes ReceivableSales	- Select -	- Select -
July 16	Accounts Payable-Hayden Co.Accounts Receivable-Hayden Co.CashNotes ReceivableSales	- Select -	- Select -
	Accounts Receivable-Hayden Co.Allowance for Doubtful AccountsInterest ReceivableNotes ReceivableSales	- Select -	- Select -
	Accounts Receivable-Hayden Co.Allowance for Doubtful AccountsCashNotes ReceivableSales	- Select -	- Select -
Nov. 23-reinstate	Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales	- Select -	- Select -
	Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales	- Select -	- Select -
Nov. 23-collection	Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales	- Select -	- Select -
	Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales	- Select -	- Select -
Dec. 31-write-off	Allowance for Doubtful AccountsBad Debt ExpenseCashInterest ExpenseSales	- Select -	- Select -
	Accounts Payable-Cavey Co.Accounts Receivable-Cavey Co.Allowance for Doubtful AccountsBad Debt ExpenseInterest Revenue	- Select -	- Select -
	Accounts Payable-Fogle Co.Accounts Receivable-Fogle Co.Allowance for Doubtful AccountsBad Debt ExpenseCash	- Select -	- Select -
	Accounts Payable-Lake FurnitureAccounts Receivable-Lake FurnitureAllowance for Doubtful AccountsCashSales	- Select -	- Select -
	Accounts Payable-Melinda ShryerAccounts Receivable-Melinda ShryerAllowance for Doubtful AccountsCashSales	- Select -	- Select -
Dec. 31-adjusting	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseInterest Receivable	- Select -	- Select -
	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseInterest Receivable	- Select -	- Select -

Question Content Area

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

Allowance for Doubtful Accounts
Jan. 19Apr. 3Nov. 23		Jan. 1 Balance
Jan. 19July 16Nov. 23	fill in the blank	Jan. 19July 16Dec. 31	fill in the blank
Jan. 19Nov. 29Dec. 31	fill in the blank	Apr. 3July 16Nov. 23	fill in the blank
		July 16Nov. 23Dec. 31 Unadjusted Balance	fill in the blank
		Apr. 3July 16Dec. 31 Adjusting Entry	fill in the blank
		Dec. 31 Adjusted Balance	fill in the blank

Bad Debt Expense
Dec. 31 Adjusting EntryDec. 31 Unadjusted Balance

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

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 $6,750,000 for the year, determine the following:

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

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

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