Question
Entries Related to Uncollectible Accounts
The following transactions were completed by The Spencer Gallery during the current fiscal year ended December 31:
Required:
1. Record the January 1 credit balance of $49,500 in a T account (below) for Allowance for Doubtful Accounts.
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Mar. 15. |
Reinstated the account of Brad Atwell, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,355 cash in full payment of Brad’s account. |
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May 20. |
Wrote off the $13,490 balance owed by Glory Rigging Co., which is bankrupt. |
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Aug. 13. |
Received 40% of the $24,200 balance owed by Coastal Co., a bankrupt business, and wrote off the remainder as uncollectible. |
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Sept. 2. |
Reinstated the account of Lorie Kidd, which had been written off two years earlier as uncollectible. Recorded the receipt of $3,840 cash in full payment. |
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Dec. 31. |
Wrote off the following accounts as uncollectible (compound entry): Kimbro Co., $10,150; McHale Co., $3,015; Summit Furniture, $7,750; Wes Riggs, $2,190. |
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Dec. 31. |
Based on an analysis of the $1,196,000 of accounts receivable, it was estimated that $52,000 will be uncollectible. Journalized the adjusting entry. |
