Question

On December 31, 2017, when its accounts receivable were $312,000 and its account Allowance for Doubtful Accounts had an unadjusted debit balance of $2,100, Springfield Corp. estimated that $17,500 of its accounts receivable would become uncollectible, and it recorded the bad debts adjusting entry. On May 11, 2018, Springfield determined that Fei Ya Cheng's account was uncollectible and wrote off $2,000. On November 12, 2018, Cheng paid the amount previously written off. Your answer is correct. Prepare the required journal entries to record each of the above transactions. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) 2017 Date Account Titles and Explanation Debit Credit Bad Debts Expense Allowance for Doubtful Accounts 19600 2018 Date Account Titles and Explanation Debit Credit Allowance for Doubtful Accounts Accounts Receivable 2,000 SEKEREN Nov. 12 - Accounts Receivable Allowance for Doubtful Accounts 2,000
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Answer 1

Solution:

Carrying amount on 31.12.2017 = Gross receivables - Allowance for doubtful accounts = $312,000 - $17,500 = $294,500

Carrying amount on 11.05.2018 = ($312,000 - $2,000) - ($17,500 - $2,000) = $294,500

Carrying amount on 12.11.2018 = $310,000 - $17,500 = $292,500