Question

Exercise 8-5 On December 31, 2017, when its accounts receivable were $348,000 and its account Allowance for Doubtful Accounts had an unadjusted debit balance of $2,300, Springfield Corp. estimated that $19,500 of its accounts receivable would become uncollectible, and it recorded the bad debts adjusting entry. On May 11, 2018, Springfield determined that Fei Ya Cheng's account was uncollectible and wrote off $2,200. On November 12, 2018, Cheng paid the amount previously written off. Prepare the required journal entries to record each of the above transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities and enter o for the amounts.) 2017 Date Account Titles and Explanation Debit Credit 2018 Date Account Titles and Explanation Debit Credit (To reinstate account previously written off) (To record amount collected)

Answer 1

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Answer 8-5
On December 31, 2017
Allowance for doubtful account should be	19,500.00
Balance already in account	2,300.00
Bad debt expense for December 31, 2017	21,800.00
Journal Entry On December 31, 2017
Account	Debit $	Credit $
Bad debt expense	21,800.00
Allowance for doubtful account		21,800.00
On May 11, 2018
Account receivable of Cheng written off- $ 2,200.
Journal Entry On May 11, 2018
Account	Debit $	Credit $
Allowance for doubtful account	2,200.00
Account receivable		2,200.00
On November 12, 2018
Cheng paid off the amount written off.
Journal Entry On November 12, 2018
Account	Debit $	Credit $
Account receivable	2,200.00
Allowance for doubtful account		2,200.00
(Account receivable reinstated)
Cash	2,200.00
Account receivable		2,200.00
(Collection entry recorded)
Carrying amount of Accounts Receivable	31-Dec
Accounts Receivable (gross)	246,000.00
Less: Allowance for doubtful account	19,500.00
Carrying amount of Accounts Receivable	226,500.00
Carrying amount of Accounts Receivable	11-May
Accounts Receivable (unadjusted)	246,000.00
Less: Bad debt	2,200.00
Accounts Receivable (after adjustment)	243,800.00
Less: Allowance for doubtful account (reduced by bad debt amount)	17,300.00
Carrying amount of Accounts Receivable	226,500.00
Carrying amount of Accounts Receivable	12-Nov
Accounts Receivable (after adjustment)	243,800.00
Add: Bad debt recovered	2,200.00
Less: Collection from Cheng	2,200.00
Accounts Receivable (after collection)	243,800.00
Less: Allowance for doubtful account (after bad debt recovery adjustment)	19,500.00
Carrying amount of Accounts Receivable	224,300.00