Question

At the end of 2020, Grouper Company has accounts receivable of 5816,000 and an allowance for doubtful accounts of $40,800. On January 16, 2021. Grouper Company determined that its receivable from Ramirez Company of $6,120 will not be collected and management authorized its write-oft. 38:14 Hide Time Prepare the journal entry for Grouper Company to write off the Ramirez receivable. (If no entry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not Indent manually.) Date Account Titles and Explanation Jan 16, 2021 Debit Credit List of Accounts What is the net amount expected to be collected of Grouper Company's accounts receivable before the write-off of the Ramirez receivable? Net amount expected to be collected $ List of Accounts What is the net amount expected to be collected of Grouper Company's accounts receivable after the write-off of the Ramirez receivable? Net amount expected to be collected

Answer 1

Write-off entry:

In this case, the allowance for doubtful accounts should be debited and accounts receivable for the same amount should be credited.

Journal

Date	Accounts titles and explanations	Ref.	Debit	Credit
16/1/21	Allowance for doubtful accounts		$6,120
	Accounts receivable			$6,120
	To record write off of R. company receivable.

The balance of allowance account is as below:

Allowance for doubtful accounts (adjusted) = 40,800 – 6,120 = $34,680

Net amount before write-off = Beginning AR – Beginning allowance for doubtful

                                                = 816,000 – 40,800

                                                = $775,200 (Answer)

Net amount after write-off = (Beginning AR – Write off) – Adjusted allowance for doubtful

                                                = (816,000 – 6,120) – 34,680

                                                = 809,880 – 34,680

                                                = $775,200 (Answer)

Note: Write-off must not make in difference in AR balance, since its allowance account was already made.