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 $2,085 cash in full payment of Arlene's account. Apr. 3 Wrote off the $11,950 balance owed by Premier GS Co., which is bankrupt. July 16 Received 30% of the $21,400 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 $3,400 cash in full payment. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Cavey Co., $8,985; Fogle Co., $2,670; Lake Furniture, $6,860; Melinda Shryer, $1,940. 31 Based on an analysis of the $1,058,000 of accounts receivable, it was estimated that $46,000 will be uncollectible. Journalized the adjusting entry. Required: 1. Record the January 1 credit balance of $43,800 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 $1,058,000 balance in accounts receivable reflects the adjustments made during the year. Jan. 19-reinstate Accounts Receivable-Arlene Gurley 2,085 Allowance for Doubtful Accounts 2,085 Jan. 19-collection Cash 2,085 Accounts Receivable-Arlene Gurley 2,085 Apr. 3 Allowance for Doubtful Accounts 11,950 Accounts Receivable-Premier GS Co. 11,950 July 16 Cash 6,420 Allowance for Doubtful Accounts 14,980 Accounts Receivable-Hayden Co. 21,400 3,400 Nov. 23-reinstate Accounts Receivable-Harry Carr Allowance for Doubtful Accounts 3,400 Nov. 23-collection Cash 3,400 Accounts Receivable-Harry Carr 3,400 Dec. 31-write-off Allowance for Doubtful Accounts 20,455 Accounts Receivable-Cavey Co. 8,985 Accounts Receivable-Fogle Co. 2,670 Accounts Receivable-Lake Furniture 6,860 Accounts Receivable-Melinda Shryer 1,940 Dec. 31-adjusting Bad Debt Expense Allowance for Doubtful Accounts Feedback Check My Work 2. b. Post each entry that affects the following accounts and determine the new balances: Allowance for Doubtful Accounts Apr. 3 11,950 Jan. 1 Balance 43,800 14,980 Jan. 19 2,085 July 16 Dec. 31 20,455 Nov. 23 3,400 Dec. 31 Unadjusted Balance Dec. 31 Adjusting Entry Dec. 31 Adjusted Balance Bad Debt Expense Bad Debt Expense Dec. 31 Adjusting Entry 1,900 X Feedback Check My Work Set up T accounts. Recall that under the allowance method, the entry to write off an account debits Allowance for Doubtful Accounts and credits Accounts Receivable. In such cases where an account receivable that has been written off is later collected, the account is reinstated by an entry that reverses the write-off entry. Then record the receipt of cash as payment for the account. The amount of bad debt expense is affected by the balance in the allowance account. 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). 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 12 of 1% of the sales of $6,530,000 for the year, determine the following: . Bad debt expense for the year. $ b. Balance in the allowance account after the adjustment of December 31. $ C. Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry)