Question

At the beginning of the current period, Splish Brothers Corp. had balances in Accounts Receivable of $190,800 and in Allowance for Doubtful Accounts of $9,670 (credit). During the period, it had net credit sales of $730,800 and collections of $749,620. It wrote off as uncollectible accounts receivable of $7,511. However, a $3,339 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $23,000 at the end of the period. (Omit cost of goods sold entries.) (a -d) (a) Prepare the entries to record sales and collections during the period. (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (c) Prepare the entries to record the recovery of the uncollectible account during the period. (d) Prepare the entry to record bad debt expense for the period.

Answer 1

1. Journal Entries
Date	Accounts and Explanation		Debit		Credit
(a)
Dec. 31	Accounts Receivable		$    730,800
	Sales				$730,800
	(To record the sales on account)
Dec. 31	Cash		$    749,620
	Accounts Receivable				$749,620
	(To record the collections)
(b)
Dec. 31	Allowance for Doubtful Accounts		$7,511
	Accounts Receivable				$7,511
	(To record write off of accounts receivable)
(c )
Dec. 31	Accounts Receivable		$3,339
	Allowance for Doubtful Accounts				$3,339
	(To record the Reversal of written off account due to recoveries)
Dec. 31	Cash		$3,339
	Accounts Receivable				$3,339
	(To record the recovery)
(d)
Dec. 31	Bad debts Expense		$      17,502
	Allowance for Doubtful Accounts				$17,502
	(To record bad debt expense)
Balance Required in Allowance for Doubtful Accounts			$         23,000
Estimated Balance in Allowance for Doubtful Accounts (credit)                  (9670-7511+3339)			$           5,498
Bad debts Expense for the year			$         17,502

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