In: Accounting
Allowance method entries
The following transactions were completed by 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 $1,940 cash in full payment of Arlene’s account. |
Apr. 3. | Wrote off the $11,120 balance owed by Premier GS Co., which is bankrupt. |
July 16. | Received 35% of the $19,900 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 $3,160 cash in full payment. |
Dec. 31. | Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $8,360 ; Fogle Co., $2,485 ; Lake Furniture, $ 6,385 ; Melinda Shryer, $1,805. |
Dec. 31. | Based on an analysis of the $982,100 of accounts receivable, it was estimated that $42,700 will be uncollectible. Journalized the adjusting entry. |
Required:
1. Record the January 1 credit balance of $40,700 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.
2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $982,100 balance in accounts receivable reflects the adjustments made during the year.