On December 31, 2013, when its Allowance for Doubtful Accounts had a debit balan
ID: 2447517 • Letter: O
Question
On December 31, 2013, when its Allowance for Doubtful Accounts had a debit balance of $2,100, Hunt Co. estimates that 9% of its accounts receivable balance of $87,500 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 off $2,600. On June 12, 2014, Byrd paid the amount previously written off. Prepare the journal entries on December 31, 2013, May 11, 2014, and June 12, 2014. (Credit account titles are automatically indented when amount Is entered. Do not indent manually.)Explanation / Answer
On December 31, 2013, when its Allowance for Doubtful Accounts had a debit balance of $2100, Hunt Co. estimates that 9% of its accounts receivable balance of $87,500 will become uncollectible and records the necessary adjustment to the Allowance for Doubtful Accounts.
(87500*.09) + 2100 =$9975
Dr Bad Debt Expense $9975
Cr Allowance for Doubtful Accounts $9975
On May 11, 2014, Hunt Co. determined that J. Byrd's account was uncollectible and wrote off $2600.
Dr Allowance for Doubtful Accounts $2600
Cr Accounts Receivable $2600
On June 12, 2014, Byrd's paid the amount previously written off.
Dr Accounts Receivable $2600
Cr Allowance for Doubtful Accounts $2600
Dr Cash $2600
Cr Accounts Receivable $2600
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