Question 1 At the end of 2013, Perez Corporation has accounts receivable of $1.5

Question

Question 1 At the end of 2013, Perez Corporation has accounts receivable of $1.5 million and an allowance for doubtful accounts of $78,000. On January 16, 2014, Perez determined that its $19,000 receivable from Morganfield Ltd. will not be collected, and management has authorized its writeoff. On January 31, 2014, Perez received notification that the company will be receiving $0.15 for every $1.00 of accounts receivable relating to McKinley Ltd. The company had previously written off 100% of the amount due from McKinley ($64,000).

Collapse question part (a) Prepare the journal entry for Perez Corporation to write off the Morganfield receivable and any journal entry necessary to reflect the notice regarding McKinley Ltd. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

To write off the Morganfield accounts: Account Titles and Explanation Debit Credit

To reflect the notice regarding McKinley Ltd: Account Titles and Explanation Debit Credit

Explanation / Answer

Journal entry to write off Morganfield accounts Account title & explanation Debit Credit Allowance for doubtful accounts 19000 Morganfield Ltd. 19000 (Write off of uncollectible amount) Journal entry to reflect the notice regarding McKinley Ltd Account title & explanation Debit Credit Cash 9600 McKinley Ltd 9600 (previously written off amount received) McKinley Ltd 9600 Allowance for doubtful accounts 9600 (amount written off reinstated)

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