Entries Related to Uncollectible Accounts

The following transactions were completed by The Spencer Gallery during the current fiscal year ended December 31:


1. Record the January 1 credit balance of $49,500 in a T account (below) for Allowance for Doubtful Accounts.

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.

May 20.

Wrote off the $13,490 balance owed by Glory Rigging Co., which is bankrupt.

Aug. 13.

Received 40% of the $24,200 balance owed by Coastal Co., a bankrupt business, and wrote off the remainder as uncollectible.

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.

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.

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.