Prepare the journal entries on December 31, 2016, May 11, 2017, and June 12, 201

Question

Prepare the journal entries on December 31, 2016, May 11, 2017, and June 12, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1. On December 31, 2016, when its Allowance for Doubtful Accounts had a debit balance of $1,476, Coronado Industries estimates that 10% of its accounts receivable balance of $98,500 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. 2. On May 11, 2017, Coronado Industries determined that B. Jared’s account was uncollectible and wrote off $1,168. 3. On June 12, 2017, Jared paid the amount previously written off. acyustment to 2. On . On June 12, 2017, Jared paid the amouet previously written of

Explanation / Answer

Dec 31, 2016:

Allowance required= 10% of 98500 = 9850

Allowance already available = 1476

Balance amount required = 9850-1476 = 8,374

Allowance for doubtful accounts A/c Dr. 8,374

To, Provision for allowance for doubtful accounts 8,374

Being provision for doubtful accounts created

May 11, 2017:

Bad debts A/c Dr. 1,168

To, Accounts receivable A/c 1,168

Being amount wrote off on account of bad debts

June 12, 2017:

Bank A/c Dr. 1,168

To, Bad debts A/c 1,168

Being bad debts reversed for the amount collected previously written off

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