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For a business that uses the allowance method of accounting for uncollectible receivables: Required: (a) Journalize the entries to record the following: (1) Record the
For a business that uses the allowance method of accounting for uncollectible receivables:
Required:
(a) | Journalize the entries to record the following: |
(1) | Record the adjusting entry at December 31, the end of the first fiscal year, to record the bad debt expense. The accounts receivable account has a balance of $800,000, and the contra asset account before adjustment has a debit balance of $600. Analysis of the receivables indicates uncollectible receivables of $18,000.* |
(2) | In March of the next year, the $350 owed by Fronk Co. on account is written off as uncollectible.* |
(3) | In November of the next year, $200 of the Fronk Co. account is reinstated and payment of that amount is received.* |
(4) | In December of the next year, $400 is received on the $600 owed by Dodger Co. and the remainder is written off as uncollectible.* |
(b) | Redo the entries in steps (2), (3), and (4) assuming the company uses the direct write-off method.* |
*Refer to the Chart of Accounts for exact wording of account titles. |
Journalize the entries to record the following: | |
(1) | Record the adjusting entry at December 31, the end of the first fiscal year, to record the bad debt expense. The accounts receivable account has a balance of $800,000, and the contra asset account before adjustment has a debit balance of $600. Analysis of the receivables indicates uncollectible receivables of $18,000. |
Refer to the Chart of Accounts for exact wording of account titles. |
PAGE 1
JOURNAL
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
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1 | Text entry invalid |
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(2) | At March 1 of the next year, the $350 owed by Fronk Co. on account is written off as uncollectible. |
(3) | At November 5 of the next year, $200 of the Fronk Co. account is reinstated and payment of that amount is received. |
(4) | At December 15 of the next year, $400 is received on the $600 owed by Dodger Co. and the remainder is written off as uncollectible. |
Refer to the Chart of Accounts for exact wording of account titles. |
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JOURNAL
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
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Redo the entries in steps (2), (3), and (4) assuming the company uses the direct write-off method. Refer to the Chart of Accounts for exact wording of account titles. |
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JOURNAL
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