Question

for a budiness that uses the allowance method of accounting for uncollectible recivables: Required:(a) Journalize the entries to record the following: (1) Journalize the entries to record the following: (1) Record the adjusting entry at December31, the end of the first fiscal year, to record the bad dept expense.The accounts receivable account has a balance of $800,000, and th contra asset account before adjustment had a debt balance $600. Analysis of the receivables indicate in collectible receivables of $18,000. (2) In march of the next year , the $350 owed by Frank Co. on account is written off as uncollactible. (3). In november of the next year$200 of the Fronk Co. account is reinstated and payment of that amount is received. (4). In december of the next year, $400 is received on the $600 owed by Dodger Co. and remainder is written off as uncollectible. (b) Redo the entries in step (2),(3), and (4) assuming the company uses the direct write off method.

Answer 1

a) Journal Entries using allowance method :

Date	Accounts Titles	Debit $	Credit $
2	Allowance for Uncollectible accounts	350
	Accounts Receivables		350
	(Frank co,'s accounts receivable written off)
3	Accounts Receivables	200
	Allowance for Uncollectible accounts		200
	(the account of Fronk Co. reinstated)
	Cash	200
	Accounts Receivables		200
	(accounts receivables received )
4	Cash	400
	Allowance for Uncollectible accounts	200
	Accounts Receivables		600
	(being in dec. dodger Co. account is partially received and remaining written off)

b) Journal Entries with direct written off method :

Date	Accounts Titles	Debit $	Credit $
2	Bad Debts	350
	Accounts Receivables		350
	(Frank co,'s accounts receivable written off)
3	Accounts Receivables	200
	Bad Debts		200
	(the account of Fronk Co. reinstated)
	Cash	200
	Accounts Receivables		200
	(accounts receivables received )
4	Cash	400
	Bad Debts	200
	Accounts Receivables		600
	(being in dec. dodger Co. account is partially received and remaining written off)