On December 31, 2020, Pina Colada Corp. estimated that 4% of its net accounts receivable of...

On December 31, 2020, Pina Colada Corp. estimated that 4% of its net accounts receivable of $455,200 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. The allowance account had a zero balance before adjustment on December 31, 2020. On May 11, 2021, Pina Colada Corp. determined that the Jeff Shoemaker account was uncollectible and wrote off $2,276. On June 12, 2021, Shoemaker paid the amount previously written off.

Prepare the journal entries on December 31, 2020, May 11, 2021, and June 12, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020May 11, 2021June 12, 2020June 12, 2021

Dec. 31, 2020May 11, 2021June 12, 2020June 12, 2021

Dec. 31, 2020May 11, 2021June 12, 2020June 12, 2021

	(To reverse write-off)
Dec. 31, 2020May 11, 2021June 12, 2020June 12, 2021

	(To record collection of write-off)

Solutions

Expert Solution

Date	Account	Debit	Credit
Dec 31	Bad debts expense	18,208
	Allowance for Doubtful Accounts		18,208
	(455200*4%)


May 11	Allowance for Doubtful Accounts	2276
	Accounts Receivable		2276



June 12	Allowance for Doubtful Accounts	2276
	Accounts Receivable		2276


June 12	Cash	2276
	Accounts Receivable		2276

ekkarill92 answered 2 years ago

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