Question

Exercise 8-3

At the beginning of the current period, Blue Spruce Corp. had balances in Accounts Receivable of $211,700 and in Allowance for Doubtful Accounts of $8,370 (credit). During the period, it had net credit sales of $763,800 and collections of $782,420. It wrote off as uncollectible accounts receivable of $7,326. However, a $2,985 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $25,790 at the end of the period. (Omit cost of goods sold entries.)

(a) Prepare the entries to record sales and collections during the period.
(b) Prepare the entry to record the write-off of uncollectible accounts during the period.
(c) Prepare the entries to record the recovery of the uncollectible account during the period.
(d) Prepare the entry to record bad debt expense for the period.

(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.
Account Titles and Explanation
Debit
Credit
(a)
Enter an account title to record sales
Enter a debit amount
Enter a credit amount
Enter an account title to record sales
Enter a debit amount
Enter a credit amount
(To record sales)
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount
(b)
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount
(c)
Enter an account title to reinstate account previously written off
Enter a debit amount
Enter a credit amount
Enter an account title to reinstate account previously written off
Enter a debit amount
Enter a credit amount
(To reinstate account previously written off)
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount
(d)
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount

LINK TO TEXT
LINK TO TEXT

Determine the ending balances in Accounts Receivable and Allowance for Doubtful Accounts.

Ending balance in Accounts Receivable
$Enter a dollar amount
Ending balance in Allowance for Doubtful Accounts
$Enter a dollar amount

LINK TO TEXT
LINK TO TEXT

What is the net realizable value of the receivables at the end of the period?

The net realizable value of the receivables at the end of the period $

Answer 1

Journal entries :

Date	account and explanation	debit	credit
	Account recievable	763800
	Sales revenue		763800
	(To record credit sales)
	Cash	782420
	Account receivable		782420
	(To record collection)
	Allowance for doubtful accounts	7326
	Account receivable		7326
	(To record write off)
	Account receivable	2985
	Allowance for doubtful accounts		2985
	(To record amount reinstated)
	Cash	2985
	Account receivable		2985
	(To record amount received)
	Bad debt expense	21761
	Allowance for doubtful accounts		21761
	(To record bad debt expense)

b) Ending balance of account receivable = 211700+763800-782420-7326 = 185754

Ending balance of allowance for doubtful accounts = 25790

c) Net realizable value = 185754-25790 = $159964