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 $2,460 cash in full payment of Arlenes account.
Apr. 3.Wrote off the $14,100 balance owed by Premier GS Co., which is bankrupt.
July 16.Received 25% of the $25,300 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 $4,010 cash in full payment.
Dec. 31.Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $10,605 ; Fogle Co., $3,150 ; Lake Furniture, $ 8,095 ; Melinda Shryer, $2,290.
Dec. 31.Based on an analysis of the $1,248,900 of accounts receivable, it was estimated that $54,300 will be uncollectible. Journalize the adjusting entry.
Required:
1. Record the January 1 credit balance of $51,700 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 $1,248,900 balance in accounts receivable reflects the adjustments made during the year.
Allowance method entries The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31 an. 19. Apr. 3. Wrate off the $14,100 balance owed by Premier GS Co., which is bankrupt. July 16, Received 25% of the $25,300 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalize the receipt of $2,460 cash in full payment of Arlene's account Nov. 23. Dec. 31. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,010 cash in full payment. wrote off the following accounts as uncollectible (compound entry): Cavey Co., $10,605 ; Fogle Co., $3,150 ; Lake Furniture, 8,095; Melinda Shryer, $2,290 Based on an analysis of the $1,248,900 of accounts receivable, it was estimated that $54,300 will be uncollectible. Journalize the adjusting entry. 1. Record the January 1 credit balance of $51,700 in a T account presented below in requirement 2b for Allowance for Doubtfull 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 $1,248,900 balance in accounts receivable reflects the adjustments made during the year. Jan. 19-reinstate Accounts Receivable-Arlene 2.460V Allowance for Doubtful Accounts 2460 Jan. 19-collection Cash 2.460 Accounts Recelvable-Arlene Gurley 2.460 Apr. 3 14.100 14,100 Cash 6.325 18,975 0 July 16 Allowance for Doubtful Accounts Accounts Receivable-Hayden Co. 25.300 ing Objective 4 able-Melinda Shryer 0 2,290 V Dec. 31-adjusting Bad Debt Expense Allowance for Doubtful Accounts Feedback 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 e The amount of bad debt expense is affected by the balance in the allowance account. Learning Objective 4 . b. Post each entry that affects the following T accounts and determine the new balances: Allowance for Doubtful Accounts 14,100 n. 1 Balance 18,975 Jan. 19 24,140 Nov. 23 V 51,700 V 2,460 V 4,010 48,060X 54,300X July 16 Dec. 31 Dec. 31 Unadjusted Balance Dec. 31 Adjusting Entry Dec. 31 Adjusted Balance 54,300 Bad Debt Expense Dec. 31 Adjusting Entry Dec. 31 Adjusting Entry Chook 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 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). 4 Assuming that instead of basing t following a. Bad debt expense for the year. 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 19 ofthe sales of $7,710,000 for the year, determine 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)
