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.
(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.
	Refer to the Chart of Accounts for exact wording of account titles.

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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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