Question

Option #2: Journalizing Transactions

The following was taken from the records of Wesley Branch, Co in the year ending December 31, 20x7. Journalize the following transactions in an Excel spreadsheet for year-end 20x7 using the aging method. Assume that the allowance for doubtful accounts has a beginning credit balance of $10,000 on January 1, 20x7. The assignment template is attached below.

Label the transactions below as journal entries #1 to #4, along with the dates of the entries:

1. February 20, 20x7: Wrote off Johnson account: $300.
2. May 20, 20x7: Received $360 as partial payment on the $650 account receivable due from Andrews.
3. August 10, 20x7: Received $300 from Johnson on the account written off on February 20, 20x7.
4. September 15: Wrote off the individual account receivables for the following customers as payment not expected in future: Masterson: $325; Benson: $320; Ishira: $450.

December 31, 20x7: Wesley Branch prepared the following aging schedule for it accounts receivables:

• $115,000 of Accounts Receivable (A/R) are 0-30 days late: 2.5% probability of being uncollectible.
• $45,000 of A/R are 31-60 days late: 12% probability of being uncollectible.
• $17,000 of A/R are 61-90 days late: 25% probability of being uncollectible.
• $3,500 of A/R are later than 90 days late: 60% probability of being uncollectible.

Instructions:

Using the Excel spreadsheet template provided for this assignment, submit the following items:

1. The four journal entries (1 to 4 above) with a one-sentence description for each
2. The T-account for the allowance for doubtful accounts
3. The journal entry to record bad debt expense
4. The balance sheet presentation of the net realizable value of accounts receivable

Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

Answer 1

Answer