Question

Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts receivable totaled $655,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $38,000 at the beginning of 2021 and $24,000 in receivables were written off during the year as uncollectible. Also, $1,800 in cash was received in December from a customer whose account previously had been written off. The company estimates bad debts by applying a percentage of 15% to accounts receivable at the end of the year. ints Required: 1. Prepare journal entries to record the write-off of receivables, the collection of $1,800 for previously written ff receivables, and the year-end adjusting entry for bad debt expense. 2. How would accounts receivable be shown in the 2021 year-end balance sheet? eBook Hint Print References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the write-off of receivables, the collection of $1,800 for previously written off receivables, and the year- end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction lit Journal entry worksheet 3 2 4 Record the write-off of receivables. Mc Graw Hill < Prev 9 of 9 Next

Answer 1

Event	General Journal	Debit	Credit
1	Allowance for uncollectible accounts	$24000
	Accounts receivable		$24000
	(To record written off of accounts receivable)
2	Accounts receivable	$1800
	Allowance for uncollectible accounts		$1800
	(To record reinstatement of account previously written off)
3	Cash	$1800
	Accounts receivable		$1800
	(To record collection of account previously written off)
4	Bad debt expense	$82450
	Allowance for uncollectible accounts		$82450
	(To record bad debt expense for the year)

Estimated bad debts expense= $655000*15%= $98250

Bad debt expense for the year= $38000-24000+1800-98250= $82450

2)

Balance Sheet (Partial)
Current Assets
Accounts receivable (net)	$556750

Accounts receivable (net) = Beginning balance-Estimated bad debts expense

= $655000-98250= $556750