Question

Chapter 9 Receivables 435 Nov. 20. Reinstated the account of Dugan Co., which had been write wing year as uncollectible. Journali edhe receipt of $5.900 cash in full payment of the account. Dec. 31. Wrote off the following accounts as uncolle CO., $3,000; Moore Co., $4,000; Butte Distributors, $8.000; Parker Towers, $6,700. which had been written off in the 31. Based on an analysis of the $1,200,000 of accounts receivable, it was estimat ed that $60,000 will be uncollectible. Journalized the adjusting entry. Instructions 1. Record the January 1 credit balance of $40,000 in a T account for Allowance for Doubtful Accounts. 2. Journalize the transactions. Post each entry that affects the following selected Tac- counts and determine the new balances: Allowance for Doubtful Accounts Bad Debt Expense 3. Determine the expected net realizable value of the accounts receivable as of December 31. 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 net sales of $7,500,000 for the year, determine the following a. Bad debt expense for the year. 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. ablecortimating allowance for doubtful arcounts

Answer 1

Townnal entery Nov. 20 Qok ot or 4 Sonoo To Duganco. $5900 Allowance for Doubtful $5900 Debt ning 5900 TO Berd debts all Dec 31 Bad delts Gil Or 821700 To kith co. To Moore co. To Butte Distributors To Parker Towers $ 3000 $ 4000 & 8000 & 6700 Dec. 31 Bend debts TO gic op Account & 60000 Receivable $60000 allowance Doubtful for Accont I Date Nov. 20th Dec 31st Pourticulars to Bend debts To Belance cld Amont Date 5900 Jan. 1 34100 Porticulars By Berl. old Anom $40,000 DODO 40000

Bad debts AIL Date Particulary Amount Decount Porchable 21700 Pourticulares s To Dorte nov. 20 By Allowanie 5900 75800 Dec 31st 9o Account Doubtful Receivabll Berleld I Goooo Dee 310t By 81700 81700 Account Receivables AIL Date Dec 314 Pourticulos to Berlance/61d smount 21700 smount Sorte Particulary 7000 Dec 31 st B4 Berd/elebts 1200,000 Dec 31st By Bad debts. Nov.20 By Bank 1600 By Beleid 60,000 5900 87600 I Amort Date Dec 31 Poorticulars 9o Berl. 6ld Account Receivably AIL / Amount Dorte Porticulares 1,200,000 Bc 31st By Bend debts Dec 31st By Bend debts Nov. 2017 BY Bork Dec 3184 By Berlald 21700 60.000 5900 111 2400 1,200,000 11, 200,000