On December 31, 2017, when its accounts receivable were $270,000 and its account Allowance for Doubtful...

On December 31, 2017, when its accounts receivable were $270,000 and its account Allowance for Doubtful Accounts had an unadjusted debit balance of $1,800, Canarie Corp. estimated that $15,100 of its accounts receivable would become uncollectible, and it recorded the bad debts adjusting entry. On May 11, 2018, Canarie determined that Fei Ya Cheng’s account was uncollectible and wrote off $1,700. On November 12, 2018, Cheng paid the amount previously written off. Prepare the required journal entries to record each of the above transactions. What is the carrying amount of the receivables on (1) December 31, 2017; (2) May 11, 2018; and (3) November 12, 2018, assuming that the total amount of accounts receivable of $270,000 is unchanged on each of these three dates except for any changes recorded above

Expert Solution

Solution:

Part 1 – Journal Entries

Date	General Journal	Debit	Credit
Dec.31, 2017	Bad Debt Expense (1800+15,100)	$16,900
	Allowance for Doubtful Account		$16,900
	(to record year end adjustment entry and record bad debt expense)

May.11, 2018	Allowance for Doubtful Account	$1,700
	Accounts Receivable		$1,700
	(To record wrote off accounts receivable)

Nov.12, 2018	Accounts Receivable	$1,700
	Allowance for Doubtful Account		$1,700
	(to record re-instate previously written off accounts receivable)

Nov.12, 2018	Cash	$1,700
	Accounts Receivable		$1,700
	(To record cash on account)

Part 2(1) – Carrying amount of the receivables on Dec 31, 2017

	$$	$$
Accounts Receivable	$270,000
Less: Allowance for Doubtful Accounts	-$15,100
Carrying amount of Accounts Receivable (Accounts Receivable, net)	$254,900

Part 2(2) – Carrying amount of the receivables on May 11, 2018

	$$	$$
Accounts Receivable, gross	$270,000
Less: Allowance for Doubtful Accounts ($15,100 – 1700)	-$13,400
Carrying amount of Accounts Receivable (Accounts Receivable, net)	$256,600

Part 2(3) – Carrying amount of the receivables on Nov 12, 2018

	$$	$$
Accounts Receivable, gross (270,000 - 1700)	$268,300
Less: Allowance for Doubtful Accounts	-$15,100
Carrying amount of Accounts Receivable (Accounts Receivable, net)	$253,200

Note – It is given in the question that gross accounts receivable is not changed on the given dates. So I have taken gross amount.

Hope the above calculations, working and explanations are clear to you and help you to understand the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

ekkarill92 answered 2 years ago

On December 31, 2021, when its Allowance for Doubtful Accounts

On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,371, Tamarisk, Inc. estimates that 8% of its accounts receivable balance of $77,800 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Tamarisk, Inc. determined that B. Jared's account was uncollectible and wrote off $1,135. On June 12, 2022, Jared paid the amount previously written off. Prepare the journal entries on December 31, 2021, May 11, 2022,...

On December 31, 2013, when its Allowance for Doubtful accounts had a debit balance of $1,400,...

On December 31, 2013, when its Allowance for Doubtful accounts had a debit balance of $1,400, Hunt co. estimates that 9% of its accounts receivable balance of $90000 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On may 11, 2014, Hunt Co. determined that J. Byrd's account was uncollectible and wrote of $1,200. On June 12, 2014, Byrd paid the amount previously written off. Prepare the journal entries on December 31, 2013, May 11, 2014,...

What is the difference between Accounts Receivable and the Allowance for Doubtful Accounts and when the...

What is the difference between Accounts Receivable and the Allowance for Doubtful Accounts and when the relationship can be considered reasonable

(Bad Debt Adjustment) The balance in accounts receivable at December 31 was $260,000. The allowance account...

(Bad Debt Adjustment) The balance in accounts receivable at December 31 was $260,000. The allowance account has a debit balance of $7,500 before the year end adjustment. Sales for the year were $985,000. Prepare the adjusting entry for each of the following independent situations: a. 3% of outstanding accounts receivable are uncollectible b. 1.5% of sales are uncollectible c. An aging of the accounts show that $8,000 of the accounts receivable are uncollectible

At December 31, 2017, Engel Company had a balance of $770,000 in its Accounts Receivable account...

At December 31, 2017, Engel Company had a balance of $770,000 in its Accounts Receivable account and an unused balance of $7,000 in its Allowance for Doubtful Accounts. The company then analyzed and aged its accounts receivable as follows: Current $468,000 1-60 days past due 244,000 61-180 days past due 38,000 Over 180 days past due 20,000 ------------- Total accounts receivable $770,000 ======== In the past, the company experienced losses as follows: 1% of current balances, 5% of balances 1-60 days past due, 15% of balances 61-180...

On Dec 31, 2016, Rawda Company had accounts receivable of $750,000 and allowance for doubtful accounts...

On Dec 31, 2016, Rawda Company had accounts receivable of $750,000 and allowance for doubtful accounts that had a debit balance of $10,000. The company uses an aging schedule (aging method) to estimate its uncollectible accounts as shown in the following table: # of Days Outstanding Amounts Estimated % Uncollectible 0-30 $ 200,000 2% 31-60 200,000 4% 61-90 200,000 6% Over 90 150,000 8% Requirements: What is the required balance for the allowance of doubtful accounts on Dec 31, 2016?...

Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31,...

Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2017, of $2,200. Required: a. Prepare the adjusting entry assuming that Winfrey estimates uncollectible accounts based on an aging analysis as follows. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) December 31, 2017 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectible $ 148,000 Not due (under 30 days) 1 % 43,000 1 to...

Accounts Debits Credits cash $41,150 Account Receivable 4,806 Allowance for Doubtful Accounts 58 Inventory 2,670...

Accounts Debits Credits cash $41,150 Account Receivable 4,806 Allowance for Doubtful Accounts 58 Inventory 2,670 Prepaid Insurance 2,200 Land 20,000 Accounts Payable 1,500 Interest Payable 90 Payroll Taxes Payable 113 Wages Payable 817 Mortgage Payable 18,000 Owners investment 50,000 Retained Earnings - Sales 11,680 Repair revenue 20 Cost of goods sold 3,504 Advertising 200 Bad debt expense 58 Bank charges 50 Insurance expense 200 Payroll taxes 603 Rent 2,240 Supplies 150 Wages 4,357 Interest...

Randy has the following account balances on its balance sheet dated December 31, 2017: Accounts receivable...

Randy has the following account balances on its balance sheet dated December 31, 2017: Accounts receivable 300,000 Less: Allowance for doubtful accounts (50,000) $250,000 2 Transactions in 2018 included the following: 1. Accounts receivable of $100,000 were collected. This amount included gross accounts of $50,000 on which 2% sales discounts were allowed. (Randy used the gross method for sales discounts.) 2. Accounts receivable of $10,000 that had been written off in 2017 were collected in 2018. 3. Accounts of $40,000...

Panamerican Foods has Accounts Receivable of $230,000 and an Allowance for Doubtful Accounts of $13,000. If...

Panamerican Foods has Accounts Receivable of $230,000 and an Allowance for Doubtful Accounts of $13,000. If it writes-off a customer account balance of $1,300, what is the amount of its net accounts receivable? Multiple Choice $217,000 None of the other answers are correct. $215,700 $228,700 $230,000

Question