Question

i just want know the answer for the rung boxes

thank u

Answer 1

For September 13, 2022 entry

Sale on account = $35,000
Received = $24,500
Remaining Balance = $10,500
Out of this remaining $6,000 were received in 2022. That means still outstanding from 2021 is $4,500
We need to write off $4,500. We have $2,100 in the Allowance balance.

The correct entry would be (alternative 1)

Allowance for Doubtful Account Debit $2,100
Bad Debts Written Off Debit $2,400
Accounts Receivable Credit $4,500

(Alternative 2)

Allowance for Doubtful Account Debit        $4,500
Accounts Receivable Credit                                    $4,500

December 31, 2022 entry

The total outstanding balance right now is $48,000 - $42,500. which is $5,500. The provision on this at 20% should be $1,100

(if alternative 1 above is used in the earlier entry)

Bad Debts Expense $1,100
Allowance for Doubtful Accounts $1,100

(if alternative 2 above is used in the earlier entry)

Bad Debts Expense $3,500
Allowance for Doubtful Accounts $3,500

Update the correct amount in the ledger, it should not give you wrong answer prompt.