Question

The accounts receivable balance for Renue Spa at December 31, 2017, was $83,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,600. During 2018, $2,400 of accounts receivable were written off as uncollectible. In addition, Renue expectedly collected $190 of receivables that had been written off in a previous accounting period. Services provided on account during 2018 were $212,000, and cash collections from receivables were $213.945. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information in accounts under an accounting equation b. Based on the preceding information, compute (after year-end adjustment): 1. (1) Balance of Allowance for Doubtful Accounts at December 31, 2018 2. (2) Balance of Accounts Receivable at December 31, 2018 3. (3) Net realizable value of Accounts Receivable at December 31, 2018 c. What amount of uncollectible accounts expense will Renue Spa for 2018? Complete this question by entering your answers in the tabs below. Reg A Req B and C Based on the preceding information, compute (after year-end adjustment): (1) Balance of Allowance for Doubtful Accounts at December 31, 2018 (2) Balance of Accounts Receivable at December 31, 2018 (3) Net realizable value of Accounts Receivable at December 31, 2018 What amount of uncollectible accounts expense will Renue Spa for 2018? Show less $ 6,450 b-1. Allowance for doubtful accounts 2. Accounts receivable -3.Net realizable value Uncollectible accounts expense s

Answer 1

Required A :- Journal entries :-

Sr no.	Journal	Debit (in $)	Credit (in $)
1.	Allowance for doubtful account	2400
	To Account receivable		2400
	(Being Account receivable written off)
2a.	Account receivable	190
	To allow for doubtful accounts		190
	(Being reversal of written off and now recovered amount )
2b.	Cash	190
	To Account receivable		190
	(Being account receivable recovered)
3.	Account receivable	212000
	To sales revenue		212000
	(Being credit sales)
4	cash	213945
	To account receivables		213945
	(Being cash collected at account receivable)
5	uncollectible account expenses	2120
	To allowance of doubtful account (212000*1%)		2120

T-accounts  

Cash:-

Beg balance
2b	190
4	213945
End.balance	214135

​​​​​​Account receivable

Beg.balance	83000	2400	1
2a	190	190	2b
3	212000	213945	4
End.balance	78655

Allowances for doubtful account

Beg . Balance		2600
1	2400	190	2a
		2120	5
End.balance		2510

Service revenue

Beg.balance
		212000	3
End.balance		212000

Uncollectible accounts expenses

Beg.balance
5	2120
End.balance	2120

Required b & c :-

B-1	Allowance for doubtful account	$2510
B-2	Account receivable	$78655
B-3	Net realizable value (78655-2510)	$76145
C	uncollectible account expenses	$2120