Additional Exercise 203 Avett Furniture Store has credit sales of $400,000 in 20

Question

Additional Exercise 203

Avett Furniture Store has credit sales of $400,000 in 2015 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2015, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7,000 will prove to be uncollectible.

On March 4, 2016, the credit manager authorizes a write-off of the $1,200 balance owed by B. Fernitti.

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

SAVE FOR LATER

SUBMIT ANSWER

Additional Exercise 203

Avett Furniture Store has credit sales of $400,000 in 2015 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2015, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7,000 will prove to be uncollectible.

On March 4, 2016, the credit manager authorizes a write-off of the $1,200 balance owed by B. Fernitti.

Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2015. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

Show the balance sheet presentation of accounts receivable on December 31, 2015.
Avett Furniture Store
Balance Sheet

$

LessAdd

:

$

On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000.

Make the appropriate entry to record the write-off of the Ferntti account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

Also show the balance sheet presentation of accounts receivable before and after the write-off.
Before Write-off After Write-off

Prepaid ExpensesInventoryAccounts ReceivableAllowance for Doubtful AccountsCash Realizable Value

$

$

AddLess

:

Cash Realizable ValueAllowance for Doubtful AccountsInventoryPrepaid ExpensesAccounts Receivable

Cash Realizable ValuePrepaid ExpensesInventoryAllowance for Doubtful AccountsAccounts Receivable

$

$

Question Attempts: 0 of 1 used

SAVE FOR LATER

SUBMIT ANSWER

Explanation / Answer

SOLUTION

(1)

(2)

(3)

Balance sheet presentation-

S.No. Account titles and Explanation Debit ($) Credit ($) 1. Bad Debt Expense ($7,000 + $600) 7,600 Allowance for Doubtful Accounts 7,600 (To record the estimated uncollectible accounts expense)

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