EXERCISE 7-12 Entries for uncollectible Objective 5 Journalize the following transactions in the accounts of Graybeal Co.a company that uses the direct write-off method o Name: accounts, using direct write off method Sold merchandise on account to Dr. Jerry Jagers $18,500.The cost of the accounting for uncollectible receivables Sept 12. Received $9,000 from Dr. Jerry Jagers and wrote off the remainder owed on the Dec. 20. Reinstated the account of Dr. Jerry Jagers that had been written off on merchandise sold was $11,100. sale of July 6 as uncollectible. September 12 and received $9,500 cash in full payment Date Descri Debit Credit EXERCISE 7-13 Effect of doubtful accounts on net income Objectives 4,5 During its first year of operations, O'Hara Automotive Supply Co. had net sales of $4,050,000, wrote off $112,350 of accounts as uncollectible using the direct write-off method, and reported net income of $212,800. If the allowance method of accounting for uncollectibles had been used, 2 % of net sales would have been estimated as uncollectible. Determine what the net income would have been if the allowance method had been used C7-7 EXERCISE 7-6 Adjustment for uncollectible accounts Objective 4 Using the data in Exercise 7-5, assume that the allowance for doubtful accounts for Intimacy Mattress Company has a credit balance of $7,180 before adjustment on November 30. Journalize the adjusting entry for uncollectible accounts as of November 30. Debit Credit Date Description EXERCISE 7-7 Estimating doubtful accounts Objective 4 Kubota Co. is a wholesaler of office supplies. An aging of the company's accounts receivable on December 31, 2006, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Amount Balance Uncollectible Uncollectible Age Interval Not past due 450,000_ 31-60 days past due 5 1,000- 6 61-90 days past due..2,500 91-180 days past due7,500...60 Over 180 days past due5,500..80 Totals 5636,500 Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31,2006. EXERCISE 7-8 Entry for uncollectible accounts Objective 4 Using the data in Exercise 7-7,assume that the allowance for doubtful accounts for Kubota Co.had a debit balance of $1,575 as of December 31, 2006. Journalize the adjusting entry for uncollectible accounts as of December 31,2006. Date Description Debit DeotCredit