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 $2,795 cash in full payment of Arlene's account. Apr. 3. Wrote off the $16,020 balance owed by Premier GS Co., which is bankrupt. July 16. Received 40% of the $28,700 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,555 Nov. 23. cash in full payment. Dec. 31. Wrote off the following accounts as uncollectible (one entry): Cavey Co.,$12,045; Fogle Co., $3,580; Lake Furniture, $9,195; Melinda Shryer, $2,600. Based on an analysis of the $1,416,800 of accounts receivable, it was estimated that $61,600 will be uncollectible. Journalized Dec. 31. the adjusting entry. Required: 1. Record the January 1 credit balance of $58,700 in a T account presented below in requirement 2b 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 $1,416,800 balance in accounts receivable reflects the adjustments made during the year. Accounts Receivable-Arlene Gurley Jan. 19-reinstate 2,795 Allowance for Doubtful Accounts 2,795 Cash Jan. 19-collection 2,795 Accounts Receivable-Arlene Gurley 2,795 Allowance for Doubtful Accounts Apr. 3 16,020 Accounts Receivable-Premier GS Co. 16,020 Cash July 16 28,700 X Allowance for Doubtful Accounts 11,480 X Accounts Receivable-Hayden Co. 17,220 x Nov. 23-reinstate Accounts Receivable-Harry Carr 4,555 Allowance for Doubtful Accounts 4,555 Nov. 23-collection Cash 4,555 Accounts Receivable-Harry Carr 4,555 Allowance for Doubtful Accounts Dec. 31-write-off 27,420 Accounts Receivable-Cavey Co. 12,045 Accounts Receivable-Fogle Co. 3,580 > Accounts Receivable-Lake Furniture 9,195 Accounts Receivable-Melinda Shryer 2,600 Dec. 31-adjusting Bad Debt Expense 61,600 X Allowance for Doubtful Accounts 61,600 X Allowance for Doubtful Accounts Apr. 3 16,020 Jan. 1 Balance 58,700 28,700 x Jan. 19 2,795 July 16 Dec. 31 27,420 Nov. 23 4,555 27,420 x Dec. 31 Unadjusted Balance Dec. 31 Adjusting Entry 61,600 X Dec. 31 Adjusted Balance 34,180 x Bad Debt Expense Dec. 31 Adjusting Entry 34,180 X Feedback 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). 1,355,200 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 $8,750,000 for the year, determine the following: a. Bad debt expense for the year. $ 437,500 X b. Balance in the allowance account after the adjustment of December 31. 34,180 X C. Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). 34,180 x
