Journal Entries for Credit Losses

At January 1, the Blake Company had the following accounts on its books:

Accounts Receivable	$130,000	Debit
Allowance for Doubtful Accounts	$7,000	Credit

During the year, credit sales were $850,000 and collections on account were $794,000. The following transactions, among others, occurred during the year:

Jan.11	Wrote off J. Wolf's account,	$3,000
Apr.29	Wrote off B. Avery's account,	$2,000
Nov.15	Received $1,000 from B. Avery to pay a debt that had been written off April 29. This amount is not included in the $794,000 collections.
Dec.05	Wrote off D. Wright's account,	$2,250
Dec.31	In an adjusting entry, recorded the allowance for doubtful accounts at	1%
	of credit sales for the year.

Required

a. Prepare the journal entries to record the credit sales, the collections on account, the transactions, and the adjustment.

b. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31 balance sheet.

a.

General Journal
Date	Description	Debit	Credit
Dec.31	Answer

Answer	Answer
	Answer

Answer	Answer
	To record sales revenue for the year.
Dec.31	Answer

Answer	Answer
	Answer

Answer	Answer
	To record collections on account for the year.
Jan.11	Answer

Answer	Answer
	Answer

Answer	Answer
	To write off J. Wolf's account.
Apr.29	Answer

Answer	Answer
	Answer

Answer	Answer
	To write off B. Avery's account.
Nov.15	Answer

Answer	Answer
	Answer

Answer	Answer
	To reinstate B. Avery's account.
Nov.15	Answer

Answer	Answer
	Answer

Answer	Answer
	To record collection from B. Avery.
Dec.05	Answer

Answer	Answer
	Answer

Answer	Answer
	To write-off D. Wright's account.
Dec.31	Answer

Answer	Answer
	Answer

Answer	Answer
	To record allowance for doubtful accounts.

b.

Answer

Answer
	Answer

Answer
		Answer