The balance sheet of Antonio Vivaldi Company at December 31, 2009, includes the

Question

The balance sheet of Antonio Vivaldi Company at December 31, 2009, includes the following.?

Notes receivable $36,000 Accounts receivable 182,100 Less: Allowance for doubtful accounts 17,300 200,800 T

ransactions in 2010 include the following.

1.Accounts receivable of $138,000 were collected including accounts of $40,000 on which 2% sales discounts were allowed.

2.$6,300 was received in payment of an account which was written off the books as worthless in 2010. (Hint: Reestablish the receivable account.)

3. Customer accounts of $17,500 were written off during the year.

4. At year-end the Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.

Instructions:

Prepare all journal entries necessary to reflect the transaction above.

Explanation / Answer

Journal Entries Allowance for doubtful accounts Ledger Sr.No. Account Title Debit Credit Debit Credit 1 Cash 137200 To Accounts Receivable 17500 By balance b/d 17300 Discount allowed 800 By Accounts Receivable 6300 Accounts Receivable 138000 By Bad Debt (balancing figure) 13900 To balance c/f 20000 2a Accounts Receivable 6300 Allowance for doubtful accounts 6300 Total 37500 Total 37500 2b Cash 6300 Accounts Receivable 6300 3 Allowance for doubtful accounts 17500 Accounts Receivable 17500 4 Bad debt 13900 Allowance for doubtful accounts 13900

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