just need to fix wrong part
Allowance method entries The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31 Jan. 19 Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalize the receipt of $1,510 cash in full payment of Arie account. Apr. 3. Wrote off the $8,650 balance owed by Premier GS Co., which is bankrupt. July 16. Received 25% of the $15,500 balance owed by Hayden Co., a bankrupt business, and wrote on the remainder as uncollectible. Nov. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $2,460 cash in full payment 23. Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $6,510 ; Fogle Co., $1,935; Lake Furniture, $ 4,970 ; Melinds Shryer, $1,40s Dec. 31. Based on an analysis of the $765,900 of accounts receivable, it was estimated that $33,300 will be uncollectible. Journalize the adjusting entry Required: 1. Record the January 1 credit balance of $31,700 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts. 2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $765,900 balance in ccounts receivable reflects the adjustments made during the year Jan. 19-reinstate Accounts Recelvable-Ariene Gurley Y Allowance for Doubtful Accounts Jan. 19-colection Cash 1,510 Accounts Receivable-Ariene Gurley 1,51 Allowance for Doubtful Accounts Apr 3 Accounts Receivable-Premier GS Co. 8,650 Accounts Receivable-Hayden Co. 15,500 Nov. 23-reinstate Accounts Receiva 2,460 Allowance for Doubtful Accounts 2,460 Cash 2,460 Nov. 23-colection Accounts Receivable-Harry Carr 2,460 Dec. 31-wite-off Alowance for Doubtful Accounts Accounts Receivable-Cavey Co. Accounts Receivable-Fogle Co. Accounts Receivable-Lake Furniture 1,935 4,970 1405 Accounts Receivable-Melinda Shryer- Cmv Dec 31 sojustind Deb Expe Allowance for Doubtful AccountsY Check My Work Set up T accounts. Recall that under the allowance method, the entry to write off an account debits Allowance for Doubtful Accounts and credits Accounts Receivable. In such cases where an account receivable that has been written off is later collected, the account is reinstated by an entry that reverses the write-off entry. Then record the receipt of cash as payment for the account The amount of bad debt expense is affected by the balance in the allowance account 2. b. Post each entry that affects the follo wing T accounts and determine the new balances: Allowance for Doubtful Accounts Apr. 3 v July 16 Dec. 31 V 8,650 | VJan. 1 Balance 11,625 Jan. 19 14,820| Nov. 23 v' 31,700 1,510 2,460 6,320 26,980 | X Dec. 31 Unadjusted Balance Dec. 31 Adjusting Entry Dec. 31 Adjusted Balance 26,980 X Bad Debt Expense Dec. 31 Adjusting Entry 26,980 x Foedback Chack My Work Set up T accounts. Recall that under the allowance method, the entry to write off an account debits Allowance for Doubtful Accounts and credits Accounts Receivable. In such cases where an account receivable that has been written off is later collected, the account is reinstated by an entry that reverses the write-off entry. Then record the receipt of cash as payment for the account. The amount of bad debt expense is affected by the balance in the allowance account Learning Objective 4. of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). 732,600 4. Assuming that instead of basing the provision for uncollecti expense on, of 1% of the sales of $4,730,000 for the year, determine the following: a. Bad debt expense for the year. ble accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimate 23,650 b. Balance in the allowance account after the adjustment of December 31 17,3301 x c. Expected n et realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry) 748,570 | Feedback Check My Work Remember that net realizable value is the amount that is expected to be collected or realized The analysis of receivables method places more emphasis on the net realizable value of the receivables and, thus, emphasizes the balance sheet. That is, the amount of the adjusting entry is the amount that will yield an adjusted balance for Allowance for Doubtful Accounts equal to that estimated by the aging schedule The analysis of receivables method is based on the assumption that the longer an account receivable is outstanding the less likely that it will be collected Learning Objective 4
