The following transactions were completed by wild Trout Gallery during the curre

Question

The following transactions were completed by wild Trout Gallery during the current flscal year ended Reinstated the account of Arlene Gurey, which had b written off in the preceding year as uncollectibe. Journaline the receipt of $1,650 cash in ful payment of Alenes pr. 3. Wrote off the $9,430 balance owed by Premier GS Ca, which is bankrupt. Judy 16, Received 30% of the $17,000 balance owed by Harden Co, a bankrupt business, and wrot" of" theremainder as unco etti years earlier as uncollectible Recorded the receipt of $2,690 cash in full payment Required: be uncolectible. Journaline the adjusting entry or Doubolul Accounts ul Accounts Accounts R for Doubthud Ae Accounts

Explanation / Answer

2.b.

3.

4.

a. Bad debt expense = $51,700 (1% of 5,170,000 )

b. Balance in allowance account = $53,205 ($1,505 + $51,700)

c. Net realizable value of accounts receivable = $783,995 ($837,200 - $53,205)

Allowance for doubtful accounts Date Details Debit Date Details Credit Apr.3 A/R - Premier GS Co. 9450 Jan.1 Beg.Bal. 34700 July.16 A/R - Hayden Co. 11900 Jan.19 A/R - Arlene Gllery 1650 Dec.31 Write off 16185 Nov.23 A/R - Harry Carr 2690 Dec.31 Unadjusted Bal. 1505 39040 39040 Dec.31 Unadjusted balance 1505 Dec.31 Adjusting entry 34895 Dec.31 Adjusted Balance 36400 Bad Debt Expense Date Details Debit Date Details Credit Dec.31 Adjusting entry 34895

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