Question

Exercise 229 The Garvey Sign Company Selected uses the allowance method in accounting for uncollectible accounts. Past account balances at December 31, 2016, and December 31, 2017, appear below: experience indicates that 6% of accounts receivable will eventually be uncollectible Net Credit Sales Accounts Receivable Allowance for Doubtful Accounts 12/31/2016 12/31/2017 400,000 $500,000 100,000 80,000 4,000 Your answer is correct Record the following events in 2017.(Credit account titles are automatically indented when the amount is entered. Do not indent manually) Aug. 10 Determined that the account of Kurt West for $900 is uncollectible. Sept. 12 Determined that the account of Jill Lynch for $3,000 is uncollectible Oct. 10 Received a check for $300 as payment on account from Kurt west, whose accounst had previously been written off as uncollectible. Date Account Titles and Explanation Debit Credit Aug 10 Allowance for Doubtful Accounts Sept. 12 Allowance for Doubtful Accounts

Answer 1

		Debit	Credit
Dec. 31	Bad debt expense	5600		=6000-400
	Allowance for Doubtful accounts		5600
	Workings:
	Allowance for Doubtful accounts, Dec 31,2016	4000
	Less: Written off	-3900
	Add: Account Reinstated	300
	Allowance for Doubtful accounts, Dec 31,2017	400