Question

Direct Write-Off Method

Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables:

Oct. 2: Received $2,450 from William Pruitt and wrote off the remainder owed of $2,330 as uncollectible. If an amount box does not require an entry, leave it blank.

Oct. 2

Dec. 20: Reinstated the account of William Pruitt and received $2,330 cash in full payment.

Dec. 20-Reinstate
Dec. 20-Collection

2.) Allowance Method

Journalize the following transactions, using the allowance method of accounting for uncollectible receivables:

Oct. 2. Received $2,450 from Paula Spitler and wrote off the remainder owed of $3,580 as uncollectible. If an amount box does not require an entry, leave it blank.

Oct. 2

Dec. 20. Reinstated the account of Paula Spitler and received $3,580 cash in full payment.

Reinstate
Collection

3.) Percent of Sales Method

At the end of the current year, Accounts Receivable has a balance of $815,000; Allowance for Doubtful Accounts has a debit balance of $7,500; and sales for the year total $3,670,000. Bad debt expense is estimated at 1/2 of 1% of sales.

a. Determine the amount of the adjusting entry for uncollectible accounts.
$

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

	Adjusted Balance Debit (Credit)
Accounts Receivable	$
Allowance for Doubtful Accounts	$
Bad Debt Expense	$

c. Determine the net realizable value of accounts receivable.
$

4.) Analysis of Receivables Method

At the end of the current year, Accounts Receivable has a balance of $620,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,790,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $28,600.

a. Determine the amount of the adjusting entry for uncollectible accounts.
$

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

Accounts Receivable	$
Allowance for Doubtful Accounts	$
Bad Debt Expense	$

c. Determine the net realizable value of accounts receivable.
$

5.) Note Receivable

Hasty and Tasty Foodservice received a 120-day, 9% note for $24,000, dated April 9, from a customer on account. Assume 360 days in a year.

a. Determine the due date of the note.

b. Determine the maturity value of the note.
$

c. Journalize the entry to record the receipt of the payment of the note at maturity. If an amount box does not require an entry, leave it blank.

Answer 1

As question contains multiple parts answered for the First Four Only

1(1) Direct Write off Method

Oct,20

Cash A/c dr. 2450

Bad-debt Exp. A/c Dr. 2330

To William Pruitt A/c Cr. 4780

(being Expense directly written off)

Dec, 20

Cash A/c Dr . 2330

To bad-debt Reverse A/c 2330

(being bad-debted  Amt written back)

1(2) Allowance Method

Oct,20

Cash A/c dr. 2450

Allowance for Bad-debt A/c Dr. 3580

To Paula Spitler A/c Cr. 6030

(being Expense directly written off)

Dec, 20

Cash A/c Dr . 2330

To Paula Spitler A/c 2330

(being collection recorded)

Paula Spitler A/c Dr. 2330

TO Allowance for Bad-debt A/c 2330

(being bad-debted  Amt written back)

1(3) Percent of Sales Method

a. amount of the adjusting entry for uncollectible accounts

=  Bad debt expense is estimated at 1/2 of 1% of sales.

=1/2*1%*3670000

=18350

b. the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

	Adjusted Balance Debit (Credit)
Accounts Receivable (assume that 815000 is after ADA of 7500 )	$ 815000-10850=804150
Allowance for Doubtful Accounts	$7500+10850 (bal figure)=18350
Bad Debt Expense	$18350

c.  net realizable value of accounts receivable. = 804150

1(4) Analysis of Receivables Method

a. amount of the adjusting entry for uncollectible accounts

=  balance of Allowance for Doubtful Accounts is estimated as $28,600.-opening balance 5500

= 23100

b. the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

	Adjusted Balance Debit (Credit)
Accounts Receivable (assume that 620000 is after ADA of 5500 )	$ 620000-23100= 596900
Allowance for Doubtful Accounts	$5500+23100 (bal figure)=28600
Bad Debt Expense	$ 28600

c.  net realizable value of accounts receivable. = 596900