Question

UNCOLLECTIBLE ACCOUNTS-ALLOWANCE METHOD Lewis Warehouse used the allowance method to record the following transactions, adjusting entries, and closing entries during the year ended December 31, 20- Feb. 7 Received 70% of the $8,000 balance owed by Luxury Sofas, a bank- LO1/2) rupt business, and wrote off the remainder as uncollectible Reinstated the account of Sandy Johnson, which had been written off in the preceding year, and received $3,725 cash in full settlement Wrote off the $9,350 balance owed by Izumi Goto as uncollectible Reinstated the account of Doreen Woods, which had been written off in the preceding year, and received $4,320 cash in full settlement Wrote off the following accounts as uncollectible, in compound entry form: Schmidt & Yeager, $13,945; Economy Homes, $15,830; Davis Industries, $11,865 May 26 Aug. 15 Oct. 6 Dec. 29 Based on an aging analysis of the $1,175,000 of accounts receivable it was estimated that $67,150 will be uncollectible. Made the adjust ing entry Made the entry to close the appropriate account to Income Summary 31 31 Selected accounts and beginning balances on January 1, 20-, are as follows: 122.1 313 532 REQUIRED Allowance for Doubtful Accounts $49,850 credit Income Summary Bad Debt Expense 1. Open the three selected general ledger accounts. 2. Enter the transactions and the adjusting and closing entries in a general journal (page 6). After each entry, post to the appropriate selected accounts. 3. Determine the net realizable value as of December 31, 20-

Answer 1

Question is about Lewis warehouse who used allowance method. Answer is given accordingly: Prepared journal entries, T accounts and lastly, Net realizable value of Receivables.