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 $$2,660$ cash in full payment of Arlene's account.

Apr. $3$ Wrote off the $$12,750$ balance owed by Premier GS Co$.,$ which is bankrupt.

July $16$ Received $25\%$ of the $$22,000$ 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 $$4,000$ cash in full payment.

Dec. $31$ Wrote off the following accounts as uncollectible $($one entry$)$: Cavey Co$.,$ $$3,300$; Fogle Co$.,$ $$8,100$; Lake Furniture, $$11,400$; Melinda Shryer, $$1,200.$

$31$ Based on an analysis of the $$2,350,000$ of accounts receivable, it was estimated that $$60,000$ will be uncollectible. Journalized the adjusting entry.

Required:

$1.$ Record the January $1$ credit balance of $$50,000$ in a T account presented below in requirement $2$b for Allowance for Doubtful Accounts.

Question Content Area

$2.$ a$.$ Journalize the transactions. Note: For the December $31$ adjusting entry, assume the $$2,350,000$ balance in accounts receivable reflects the adjustments made during the year. If an amount box does not require an entry, leave it blank.

Jan. $19-$reinstate

Accounts Receivable$-$Arlene Gurley

$2,660$

Allowance for Doubtful Accounts

$2,660$

Jan. $19-$collection

Cash

$2,660$

Accounts Receivable$-$Arlene Gurley

$2,660$

Apr. $3$

Allowance for Doubtful Accounts

$12,750$

Accounts Receivable$-$Premier GS Co$.$

$12,750$

July $16$

Cash

Allowance for Doubtful Accounts

Accounts Receivable$-$Hayden Co$.$

Nov. $23-$reinstate

Nov. $23-$collection

Dec. $31-$write$-$off

Dec. $31-$adjusting

Question Content Area

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

Allowance for Doubtful Accounts

fill in the blank $959971$ffc$05$f$011\_2$

Jan. $1$ Balance fill in the blank $959971$ffc$05$f$011\_3$

fill in the blank $959971$ffc$05$f$011\_5$

fill in the blank $959971$ffc$05$f$011\_7$

fill in the blank $959971$ffc$05$f$011\_9$

fill in the blank $959971$ffc$05$f$011\_11$

fill in the blank $959971$ffc$05$f$011\_13$

fill in the blank $959971$ffc$05$f$011\_15$

Dec. $31$ Adjusted Balance fill in the blank $959971$ffc$05$f$011\_16$

Bad Debt Expense

fill in the blank $959971$ffc$05$f$011\_18$

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 c$49506073$ff$502$e$\_1$

$4.$ 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 $(1)/(2)$ of $1\%$ of the sales of $$15,800,000$ for the year, determine the following:

a$.$ Bad debt expense for the year.

$fill in the blank c$49506073$ff$502$e$\_2$

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

$fill in the blank c$49506073$ff$502$e$\_3$

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 c$49506073$ff$502$e$\_4$