Question

Exercise 8-3 (Part Level Submission) At the beginning of the current period, Crane Company had balances in Accounts Receivable of $192,800 and in Allowance for Doubtful Accounts of $8,520 (credit) During the period, it had net credit sales of $722,500 and collections of $708,940. It wrote off as uncollectible accounts receivable of $7,972. However, a $3,275 account previously written off as uncollectible was recovered before the end of the current period. ncollectible accounts are estimated tồ to a S2 2 で40 at the end of ne er od 0 it cost of g ts sold entries.) (a -d) (a) Prepare the entries to record sales and collections during the period (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (c) Prepare the entries to record the recovery of the uncollectible account during the period (d) Prepare the entry to record bad debt expense for the period.

Answer 1

Date Account Description Debit Credit Accounts Receivables $722,500 Sales $722,500 (Being net credit sales recorded) Cash $708,940 Accounts Receivables $708,940 (Being collections made from debtors recorded) Date Aacount Description Debit Credit Allowance for Doubtful Accounts 7,972 Accounts Receivables $7,972 (Being uncollectible accounts receivable written off against the provision) Date Account Description Debit Credit Accounts Receivables $3,275 Allowancefor Doubtful Accounts 3,275 (Being Accounts receivable earlier written off reversed and restated in books) Cash $3,275 Accounts Receivables $3,275 (Being collections made from the debtors earlier written off) Date Aơount Description Debit Credit Bad debts expense (See WN -1) $18,917 Allowance for Doubtful Accounts $18,917 (Being esti mated bad debt expensefor the period recognised) WN-1: Calculation of estimated Bad debt expense for the period (Balance Sheet approach) Estimated uncollectible Accounts receivable at the end of the period Balance under 'Allowance for Doubtful Accounts' (prior to Bad debtexpense) $8,520 Op. Bal.-$7,972 Bad debts written off+$3,275 Bad debts recovered) Additional Allowance provision for Bad debts to be created $22,740 $3,823 $18,917