PART 1

Providing for Doubtful Accounts

At the end of the current year, the accounts receivable account has a debit balance of $851,000 and sales for the year total $9,650,000.

The allowance account before adjustment has a credit balance of $11,500. Bad debt expense is estimated at 1/2 of 1% of sales.

The allowance account before adjustment has a credit balance of $11,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $36,800.

The allowance account before adjustment has a debit balance of $7,300. Bad debt expense is estimated at 1/4 of 1% of sales.

The allowance account before adjustment has a debit balance of $7,300. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $60,600.

Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.

a.

$

b.

$

c.

$

d.

PART 2

Apr.	2.	Sold merchandise on account to Peking Palace Co., $44,710. The cost of the merchandise sold was $26,090.
June	9.	Received $10,390 from Peking Palace Co. and wrote off the remainder owed on the sale of April 2 as uncollectible.
Oct.	31.	Reinstated the account of Peking Palace Co. that had been written off on June 9 and received $34,320 cash in full payment.

Journalize the above transactions in the accounts of Dining Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11