Question
The following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31: Jan. 19 Reinstated the account of Arlene
The following transactions were completed by The 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. Journalized the receipt of $1,945 cash in full payment of Arlenes account. |
Apr. | 3 | Wrote off the $11,140 balance owed by Premier GS Co., which is bankrupt. |
July | 16 | Received 35% of the $20,000 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 $3,170 cash in full payment. |
Dec. | 31 | Wrote off the following accounts as uncollectible (one entry): Cavey Co., $8,385; Fogle Co., $2,490; Lake Furniture, $6,400; Melinda Shryer, $1,810. |
31 | Based on an analysis of the $984,400 of accounts receivable, it was estimated that $42,800 will be uncollectible. Journalized the adjusting entry. |
Required:
1. Record the January 1 credit balance of $40,800 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 $984,400 balance in accounts receivable reflects the adjustments made during the year.
Jan. 19-reinstate | Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseInterest ReceivableSales | - Select - | - Select - |
Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseInterest ReceivableSales | - Select - | - Select - | |
Jan. 19-collection | Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseCashSales | - Select - | - Select - |
Accounts Receivable-Arlene GurleyAllowance for Doubtful AccountsBad Debt ExpenseCashSales | - Select - | - Select - | |
Apr. 3 | Accounts Receivable-Premier GS Co.Allowance for Doubtful AccountsBad Debt ExpenseNotes ReceivableSales | - Select - | - Select - |
Accounts Receivable-Premier GS Co.Allowance for Doubtful AccountsBad Debt ExpenseNotes ReceivableSales | - Select - | - Select - | |
July 16 | Accounts Payable-Hayden Co.Accounts Receivable-Hayden Co.CashNotes ReceivableSales | - Select - | - Select - |
Accounts Receivable-Hayden Co.Allowance for Doubtful AccountsInterest ReceivableNotes ReceivableSales | - Select - | - Select - | |
Accounts Receivable-Hayden Co.Allowance for Doubtful AccountsCashNotes ReceivableSales | - Select - | - Select - | |
Nov. 23-reinstate | Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales | - Select - | - Select - |
Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales | - Select - | - Select - | |
Nov. 23-collection | Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales | - Select - | - Select - |
Accounts Receivable-Harry CarrAllowance for Doubtful AccountsCashInterest ReceivableSales | - Select - | - Select - | |
Dec. 31-write-off | Allowance for Doubtful AccountsBad Debt ExpenseCashInterest ExpenseSales | - Select - | - Select - |
Accounts Payable-Cavey Co.Accounts Receivable-Cavey Co.Allowance for Doubtful AccountsBad Debt ExpenseInterest Revenue | - Select - | - Select - | |
Accounts Payable-Fogle Co.Accounts Receivable-Fogle Co.Allowance for Doubtful AccountsBad Debt ExpenseCash | - Select - | - Select - | |
Accounts Payable-Lake FurnitureAccounts Receivable-Lake FurnitureAllowance for Doubtful AccountsCashSales | - Select - | - Select - | |
Accounts Payable-Melinda ShryerAccounts Receivable-Melinda ShryerAllowance for Doubtful AccountsCashSales | - Select - | - Select - | |
Dec. 31-adjusting | Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseInterest Receivable | - Select - | - Select - |
Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseInterest Receivable | - Select - | - Select - |
2. b. Post each entry that affects the following T accounts and determine the new balances:
Allowance for Doubtful Accounts | |||
---|---|---|---|
Jan. 19Apr. 3Nov. 23 | fill in the blank e9d68d044036077_2 | Jan. 1 Balance | fill in the blank e9d68d044036077_3 |
Jan. 19July 16Nov. 23 | fill in the blank e9d68d044036077_5 | Jan. 19July 16Dec. 31 | fill in the blank e9d68d044036077_7 |
Jan. 19Nov. 29Dec. 31 | fill in the blank e9d68d044036077_9 | Apr. 3July 16Nov. 23 | fill in the blank e9d68d044036077_11 |
July 16Nov. 23Dec. 31 Unadjusted Balance | fill in the blank e9d68d044036077_13 | ||
Apr. 3July 16Dec. 31 Adjusting Entry | fill in the blank e9d68d044036077_15 | ||
Dec. 31 Adjusted Balance | fill in the blank e9d68d044036077_16 |
Bad Debt Expense | |||
---|---|---|---|
Dec. 31 Adjusting EntryDec. 31 Unadjusted Balance | fill in the blank e9d68d044036077_18 |
3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). $fill in the blank 2dee57fd3fc5fb0_1
4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of of 1% of the sales of $6,080,000 for the year, determine the following:
a. Bad debt expense for the year. $fill in the blank 2dee57fd3fc5fb0_2
b. Balance in the allowance account after the adjustment of December 31. $fill in the blank 2dee57fd3fc5fb0_3
c. Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). $fill in the blank 2dee57fd3fc5fb0_4
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