For a business that uses the allowance method of accounting for uncollectible re
ID: 2483892 • Letter: F
Question
For a business that uses the allowance method of accounting for uncollectible receivables:
a. Journalize the entries to record the following:
Record the adjusting entry at December 31, 2010, the end of the fiscal year, to record the bad debt expense. The accounts receivable account has a balance of $800,000, and the contra asset account before adjustment has a debit balance of $600. Analysis of the receivables indicates uncollectible receivables of $18,000.
In March, 2011, the $350 owed by Fronk Co. on account is written off as uncollectible.
In November, 2011, $200 of the Fronk Co. account is reinstated and payment of that amount is received.
In December, 2011, $400 is received on the $600 owed by Dodger Co. and the remainder is written off as uncollectible.
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
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b. Journalize the entries to record the following, assuming the company uses the direct write-off method.
In March, 2011, the $350 owed by Fronk Co. on account is written off as uncollectible.
In November, 2011, $200 of the Fronk Co. account is reinstated and payment of that amount is received.
In December, 2011, $400 is received on the $600 owed by Dodger Co. and the remainder is written off as uncollectible.
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
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2. Reinstatement
3.
a. Journalize the entries to record the following:
Record the adjusting entry at December 31, 2010, the end of the fiscal year, to record the bad debt expense. The accounts receivable account has a balance of $800,000, and the contra asset account before adjustment has a debit balance of $600. Analysis of the receivables indicates uncollectible receivables of $18,000.
In March, 2011, the $350 owed by Fronk Co. on account is written off as uncollectible.
In November, 2011, $200 of the Fronk Co. account is reinstated and payment of that amount is received.
In December, 2011, $400 is received on the $600 owed by Dodger Co. and the remainder is written off as uncollectible.
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
1.
2.
3.
4.
Explanation / Answer
Debit Credit Mar-11 Allowance for uncollectible A/C dr. 350 To Fronk & Co. 350 Nov-11 Fronk & Co. 200 To Allowance for uncollectible A/C 200 Cash A/C dr. 200 To Fronk & Co. 200 Dec-11 Cash A/C dr. 400 Allowance for uncollectible A/C dr. 200 To Dodger & Co. 600 Bad Debts A/C dr. 350 To Allowance for uncollectible A/C 350