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Estimating and Recording Bad Debt Estimates and Write - Offs; Reporting of Accounts Receivable Mast Company's December 3 1 balances from the prior year related
Estimating and Recording Bad Debt Estimates and WriteOffs; Reporting of Accounts Receivable
Mast Company's December balances from the prior year related to accounts receivable follow.
Accounts receivable Dr
Allowance for doubtful accounts Cr
$
During the current year, $ of accounts receivable is considered uncollectible, and no more effort to collect these accounts will be made. Total sales for the current year are $ of which $ are cash sales. A total of $ cash was collected during the current year from sales that were originally made on account.
Required
a Assuming that Mast applies the allowance method to estimate net accounts receivable and uses of accounts receivable as its estimate of expected credit losses, prepare the journal entries to record writeoffs and to record bad debt expense for the current year, and disclosure on gross and net accounts receivable on the balance sheet at December of the current year.
Note: Do not use negative signs in your answers. a
Date
Dec.
Dr
Cr
Dec.
Account Name
Allowance for Doubtful Accounts
Accounts Receivable
To record account writeoff.
Bad Debt Expense
Allowance for Doubtful Accounts
To record bad debt expense.
a
Balance Sheet, December
Accounts receivable
Less: Allowance for doubtful accounts
Accounts receivable, net
b How would your answers to part a change, if at all, assuming instead that the prior year December balance in Allowance for Doubtful Accounts was a credit of $
Note: Do not use negative signs in your answers.
a
Balance Sheet, December
Accounts receivable
Less: Allowance for doubtful accounts
Accounts receivable, net
b How would your answers to part a change, if at all, assuming instead that the prior year December balance in Allowance for Doubtful Accounts was a credit of $
Note: Do not use negative signs in your answers.
b
Date
Account Name
Dr
Cr
Dec.
To record account writeoff.
Dec.
To record bad debt expense.
b
Balance Sheet, December
Accounts receivable
Less: Allowance for doubtful accounts
Accounts receivable, net
$
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