Chapter 7 (TBC) -Accounts Receivable The December 31, 20x4, balance sheet of Bra
ID: 2586816 • Letter: C
Question
Chapter 7 (TBC) -Accounts Receivable The December 31, 20x4, balance sheet of Brazos Rubber Products reports the following Accounts Receivable Allowance for Doubtful Accounts (CR balance) $141,000 3,200 At the end of each quarter, Brazos estimates doubtful accounts expense to be 1 ½% of credit sales. At the end of the year, the company ages its accounts receivable and adjusts the balance in Allowance for Doubtful Accounts to correspond to the aging schedule. During 20X5 Brazos completes the following selected transactions: Jan. 16 Wrote off as uncollectible the $403 account receivable from DePaul, Inc., and the $1,719 account receivable from Frank Shoes Company. Mar. 31 Recorded doubtful account expense based on credit sales of $100,000. Apr. 15 Received $300 from Frank Shoe Company after prolonged negotiations with Frank Shoe Company's attorney. Brazos has no hope of collecting the remainder May 13 Wrote off as uncollectible the $2,980 account receivable from M. E. Cate. June 30 Recorded doubtful account expense based on credit sales of $114,000. Aug. 9 Made a compound entry to write off the following uncollectible accounts: Clifford, Inc., $235; Matz Co., $188; and Lew Norris, $1,006. Sept. 30 Recorded doubtful account expense based on credit sales of $130,000. Oct. 18 Wrote off as uncollectible the $767 account receivable from Bliss Co. and the $430 account receivable from Micro Data. Dec. 31 Recorded doubtful account expense based on the following summary of the aging Age of Accounts Receivable Total $127,400 $%74,600 $31 Estimated Uncollectible0116 31 1-30Days-31 ,100 $12,000 $9,700 300 Dec. Made the closing entry for Doubtful Accounts Expense for the entire year. Problem requires journal paperExplanation / Answer
Journal Entry Date Particulars Dr. Amt. Cr. Amt. 16-Jan Allowance for Doubtful Accounts Dr. 2,122 To Accounts Receivable 2,122 (Record the accounts receivable w/o) 31-Mar Bad Debts Expenses Dr. 1,500 To Allowance for Doubtful Accounts 1,500 (Record the Bad Debt Expenses) 15-Apr Accounts Receivable Dr. 300 To Allowance for Doubtfull Accounts 300 (Record the accounts receivable recovered written off earlier) 15-Apr Cash Dr. 300 To Accounts Receivable 300 (Record the amount received from Frank Shoe) 13-May Allowance for Doubtful Accounts Dr. 2,980 To Accounts Receivable 2,980 (Record the accounts receivable w/o) 30-Jun Bad Debts Expenses Dr. 1,710 To Allowance for Doubtful Accounts 1,710 (Record the Bad Debt Expenses) 9-Aug Allowance for Doubtful Accounts Dr. 1,429 To Accounts Receivable 1,429 (Record the accounts receivable w/o) 30-Sep Bad Debts Expenses Dr. 1,950 To Allowance for Doubtful Accounts 1,950 (Record the Bad Debt Expenses) 18-Oct Allowance for Doubtful Accounts Dr. 1,197 To Accounts Receivable 1,197 (Record the accounts receivable w/o) 31-Dec Bad Debts Expenses Dr. 2,777 To Allowance for Doubtful Accounts 2,777 (Record the Bad Debt Expenses) Allowance for Doubtful Accounts To Accounts Receivable 2,122 By Balance b/f 3,200 To Accounts Receivable 2,980 By Bad Debts 1,500 To Accounts Receivable 1,429 By Accounts Receicable 300 To Accounts Receivable 1,197 By Bad Debts 1,710 By Bad Debts 1,950 By Balance C/f 3,709 By Bad Debts (Bal Fig.) 2,777 11,437 11,437 Total Balance Age of Accounts Receivable 1-30 Days 31-60 Days 61-90 Days Over 90 Days Accounts Receivables 127,400 74,600 31,100 12,000 9,700 Estimated % Uncollectible 0.10% 0.40% 5.00% 30.00% Amount Uncollectible 3,709 75 124 600 2,910