1. The business uses the allowance method for doubtful accounts for their accounts receivable.
The business uses the allowance method for doubtful accounts for their accounts receivable
Complete the journal entries for the following:
Business determines at end of year that 5% of accounts receivable is uncollectible. A/R at end of year was 300,000. This is their second year of operations, and the allowance has a credit balance 1,000 before any adjustment.
Business determines an accounts receivable from Smith Co. of 25,000 is worthless and not collectible.
One month later Co. pays 10,000 of their receivable.
Total Receivable at the end of the period | $ 300,000.00 | ||
Allowance for doubtful debt estimated @ 5% | $ 15,000.00 | ||
Allowance for doubtful debt Balance | $ 1,000.00 | ||
Remaining to record at the end of the period | $ 14,000.00 | ||
Journal Entries | |||
Bad Debt Expenses A/c Dr | $ 14,000.00 | ||
To Allowance for Doubtful Accounts | $ 14,000.00 | ||
Being Bad Debt write off @ 5% on receivables | |||
Bad Debt Expenses A/c Dr | $ 25,000.00 | ||
Accounts Receivable A/c | $ 25,000.00 | ||
Being Bad Debt write off of Smith Co. worht 25000 | |||
Accounts Receivable A/C Dr | $ 10,000.00 | ||
To Bad Debt Expenses A/C | $ 10,000.00 | ||
Being Reversed the bad debt collected from Smith | |||
Cash A/C Dr | $ 10,000.00 | ||
To Accounts Receivable A/c | $ 10,000.00 | ||
Being Booking of Receivable collection from Smith Co. |
1. The business uses the allowance method for doubtful accounts for their accounts receivable. The business...
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