ntries Related to Uncollectible Accounts he following transactions were completed by The Wild Trout Galiery during the current fiscal year ended December 31: lan. 19 Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,470 cash in full payment of Arlene's account. Apr. 3 Wrote off the $14,150 baiance owed by Premier GS Co., which is bankrupt. July 16 Recelved 40% of the $25,400 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. Nov. 23 Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of 54,025 ca: in full payment. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Covey Co., $10,645; Fogle Co., $3,160; Lake Furniture, $3,125; Melinde Shryer, $2,295. 31 Based on an analysis of the $1,253,500 of accounts receivable, it was estimated that $54,500 will be uncollectible. Journalized the adjusting entry. dequired: 1. Record the January 1 credit balance of $51,900 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts. 2. a. Joumalize the transactions. If an amount box does not require an entry, leave it blank, Note: For the December 31 adjusting entry, assume the $1,253,500 balance in accounts recelvable reflects the adjustments made during the year. Jon, 19-reinstote 2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry T Cbeck My Work Set up T accounts. Recall that under the allowance method, the entry to write off an occount debits Allowance for Doubtful Accounts and credits Accounts Recelvable: The amount of bad debt expense is affected by the balance in the allowance account. b. Post each entry that affects the following T accounts and determine the new balances: Feedback r Check My Wook Set up T accounts. Recall that under the allowance method, the entry to write off an account debits Allowance for Doubtful Accounts an Accounts Receivable. 3. Determine the expected net realizable value of the accounts recelvable as of December 31 (after all of the adjustments and the adjusting entry). 4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of recelvables, the adjusting entry on December 31 had been based on an estimated expense of 1/2 of 1%, of the sales of $7,740,000 for the year, determine the following: a. Bad debt expense for the year. b. Balance in the allowance account after the adjustment of December 31 . c. Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). Freation T Check My Whir Remember that net resizable value is the amount that is expected to be collected or realized. The analysis of recelvables method places more emphasis on the net realizable value of the receivables and, thus, emphasizes the balance shaet. That is, the amount of the Adtustine entru is the amount that will vield an adtusted balance for Allowance for
