Accounting Uncollectable Accounts

Entries Related to Uncollectible AccountsThe following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31:Jan. 19.Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1,630 cash in full payment of Arlene’s account.Apr. 3.Wrote off the $9,340 balance owed by Premier GS Co., which is bankrupt.July 16.Received 25% of the $16,800 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible.Nov. 23.Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $2,655 cash in full payment.Dec. 31.Wrote off the following accounts as uncollectible (one entry): Cavey Co.,$7,025; Fogle Co., $2,085; Lake Furniture, $5,365; Melinda Shryer, $1,515.Dec. 31.Based on an analysis of the $825,700 of accounts receivable, it was estimated that $35,900 will be uncollectible. Journalized the adjusting entry.Required:1. Record the January 1 credit balance of $34,200 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.2. a. Journalize the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $825,700 balance in accounts receivable reflects the adjustments made during the year.Jan. 19-reinstateAccounts Receivable-Arlene Gurley fill in the blank 0042dd055ff0f8e_2

Allowance for Doubtful Accounts 
fill in the blank 0042dd055ff0f8e_4

Jan. 19-collectionCash fill in the blank 0042dd055ff0f8e_6

Accounts Receivable-Arlene Gurley 
fill in the blank 0042dd055ff0f8e_8

Apr. 3Allowance for Doubtful Accounts fill in the blank 0042dd055ff0f8e_10

Accounts Receivable-Premier GS Co. 
fill in the blank 0042dd055ff0f8e_12

July 16Cash fill in the blank 0042dd055ff0f8e_14fill in the blank 0042dd055ff0f8e_15
Allowance for Doubtful Accounts fill in the blank 0042dd055ff0f8e_17fill in the blank 0042dd055ff0f8e_18
Accounts Receivable-Hayden Co. fill in the blank 0042dd055ff0f8e_20fill in the blank 0042dd055ff0f8e_21

Nov. 23-reinstateAccounts Receivable-Harry Carr fill in the blank 0042dd055ff0f8e_23

Allowance for Doubtful Accounts 
fill in the blank 0042dd055ff0f8e_25

Nov. 23-collectionCash fill in the blank 0042dd055ff0f8e_27

Accounts Receivable-Harry Carr 
fill in the blank 0042dd055ff0f8e_29

Dec. 31-write-offAllowance for Doubtful Accounts fill in the blank 0042dd055ff0f8e_31fill in the blank 0042dd055ff0f8e_32
Accounts Receivable-Cavey Co. fill in the blank 0042dd055ff0f8e_34fill in the blank 0042dd055ff0f8e_35
Accounts Receivable-Fogle Co. fill in the blank 0042dd055ff0f8e_37fill in the blank 0042dd055ff0f8e_38
Accounts Receivable-Lake Furniture fill in the blank 0042dd055ff0f8e_40fill in the blank 0042dd055ff0f8e_41
Accounts Receivable-Melinda Shryer fill in the blank 0042dd055ff0f8e_43fill in the blank 0042dd055ff0f8e_44

Dec. 31-adjustingBad Debt Expense fill in the blank 0042dd055ff0f8e_46

Allowance for Doubtful Accounts 
fill in the blank 0042dd055ff0f8e_48FeedbackSet up T accounts.
Recall that under the allowance method, the entry to write off an account debits Allowance for Doubtful Accounts and credits Accounts Receivable.
In such cases where an account receivable that has been written off is later collected, the account is reinstated by an entry that reverses the write-off entry. Then record the receipt of cash as payment for the account.
The amount of bad debt expense is affected by the balance in the allowance account.2. b. Post each entry that affects the following T accounts and determine the new balances:Allowance for Doubtful AccountsApr. 3 fill in the blank 7b10fa00b072fe0_2Jan. 1 Balancefill in the blank 7b10fa00b072fe0_3July 16 fill in the blank 7b10fa00b072fe0_5Jan. 19 fill in the blank 7b10fa00b072fe0_7Dec. 31 fill in the blank 7b10fa00b072fe0_9Nov. 23 fill in the blank 7b10fa00b072fe0_11

Dec. 31 Unadjusted Balance fill in the blank 7b10fa00b072fe0_13

Dec. 31 Adjusting Entry fill in the blank 7b10fa00b072fe0_15

Dec. 31 Adjusted Balancefill in the blank 7b10fa00b072fe0_16

Bad Debt ExpenseDec. 31 Adjusting Entry fill in the blank 7b10fa00b072fe0_18

FeedbackSet up T accounts.
Recall that under the allowance method, the entry to write off an account debits Allowance for Doubtful Accounts and credits Accounts Receivable.
In such cases where an account receivable that has been written off is later collected, the account is reinstated by an entry that reverses the write-off entry. Then record the receipt of cash as payment for the account.
The amount of bad debt expense is affected by the balance in the allowance account.3.  Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
$fill in the blank 7fc457f5af81fa5_14.  Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ½ of 1% of the sales of $5,100,000 for the year, determine the following:a.  Bad debt expense for the year.
$fill in the blank 7fc457f5af81fa5_2b.  Balance in the allowance account after the adjustment of December 31.
$fill in the blank 7fc457f5af81fa5_3c.  Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
$fill in the blank 7fc457f5af81fa5_4

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