Question

Question 9 The Marigold Corp. uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 5% of accounts receivable will eventually be uncollectible. Selected account balances at December 31, 2021, and December 31, 2022, appear below: Net Credit Sales Accounts Receivable Allowance for Doubtful Accounts 12/31/2021 12/31/2022 $401,000 $537,000 90,000 130,000 4,300 Record the following events in 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Aug. 10 Sept. 12 Oct 10 Determined that the account of Kurt West for $1,500 is uncollectible. Determined that the account of Jill Lynch for $2,000 is uncollectible. Received a check for $490 as payment on account from Kurt West, whose account had previously been written off as uncollectible. Date Account Titles and Explanation Debit Credit Aug. 10 Allowance for Doubtful Accounts Accounts Receivable Sept. 12 Allowance for Doubtful Accounts Accounts Receivable Oct. 10 Accounts Receivable Allowance for Doubtful Accounts (To reinstate Kurt West account previously written off)

Answer 1

Aug 1 Allowance for Doubtful accounts A /c Dr 1500

To Accounts receivable Cr. 1500

( Uncollectible amount)

Sep 12. Allowance for doubtful accounts A/c Dr 2000

To Accounts revivable Cr . 2000

(Uncollectible amount)

Oct 10 Accounts receivable A/c. Dr . 490

To Allowance for Doubtful accounts. 490

( Reinstate Kurt west A/c previously written off)

Oct 10. Cash A/c. Dr . 490

To accounts receivable. 490

(Amount collected from bad debts written off)

Bad debts provision=1500+2000-490=3010

Dec 31 Bad debts A/c . Dr .3010

To allowanceAfor Doubtful debts . 3010

(Bad debts provision for the year)