Question

Problem 7-6

The balance sheet of Ivanhoe Company at December 31, 2016, includes the following.

Notes receivable		$51,200
Accounts receivable		195,600
Less: Allowance for doubtful accounts		24,600		$222,200

Transactions in 2017 include the following.

1.		Accounts receivable of $151,300 were collected including accounts of $67,500 on which 4% sales discounts were allowed.
2.		$5,670 was received in payment of an account which was written off the books as worthless in 2016.
3.		Customer accounts of $24,800 were written off during the year.
4.		At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $20,900. This estimate is based on an analysis of aged accounts receivable.

Prepare all journal entries necessary to reflect the transactions above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1.
2.
	(To reinstate the accounts receivable)
	(To record the collection on account)
3.
4.

show list of accounts

Accounts Payable
Accounts Receivable
Advertising Expense
Allowance for Doubtful Accounts
Bad Debt Expense
Cash
Cash Over and Short
Due from Factor
Due to Customer
Discount on Notes Payable
Discount on Notes Receivable
Freight-In
Freight-Out
Gain on Disposal of Land
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Loss on Sale of Receivables
Miscellaneous Expenses
No Entry
Notes Payable
Notes Receivable
Office Expense
Owner's Drawings
Petty Cash
Postage Expense
Purchase Discounts
Recourse Liability
Sales Discounts
Sales Discounts Forfeited
Sales Revenue
Service Revenue
Supplies
Supplies Expenses
Unearned Sales Revenue

Answer 1

Prepare all journal entries necessary to reflect the transactions above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1.	Cash	148600
	Sales discount (67500*4%)	2700
	Account receivable		151300
2.	Account receivable	5670
	Allowance for doubtful accounts		5670
	(To reinstate the accounts receivable)
	Cash	5670
	Account receivable		5670
	(To record the collection on account)
3.	Allowance for doubtful accounts	24800
	Account receivable		24800
4.	Bad debt expense (20900-5470)	15430
	Allowance for doubtful accounts		15430