Question

Allowance method entries The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31: Jan. 19. Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1,830 cash in full payment of Arlene's account. Apr. 3. Wrote off the $10,490 balance owed by Premier GS Co., which is bankrupt. July 16. Received 30% of the $18,800 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. Nov. 23. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $2,985 cash in full payment. Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $7,885; Fogle Co., $2,340 ; Lake Furniture, $ 6,020 ; Melinda Shryer, $1,700. Dec. 31. Based on an analysis of the $926,900 of accounts receivable, it was estimated that $40,300 will be uncollectible. Journalized the adjusting entry.

Answer 1

b. Balance in the allowance account after the adjustment of december31 = net relisable value+unadjusted balance =28600+1620 =30220 c. Expected net reliasable value of accounts receivable =Accounts Receivable- Allowance for doubtful accounts =926900-30220 =896680