value: 1.87 points E8-5 Determining Financial Statement Effects of Write-Offs an

Question

value: 1.87 points E8-5 Determining Financial Statement Effects of Write-Offs and Recoveries [LO 8-2] Prior to recording the following, Elite Electronics, Inc. had a credit balance of $3,400 in its Allowance for Doubtful Accounts. a. On August 31, a customer balance for $440 from a prior year was determined to be uncollectible and was written off. b. On December 15, the customer balance for $440 written off on August 31 was collected in full Required: For each transaction listed above, indicate the amount and direction +for increase, - for decrease) of effects on the financial statement accounts and on the overall accounting equation. Hint: On December 15th, first reinstate the Accounts receivable and then record the collection of cash. (Enter any decreases to account balances with a minus sign.) Assets Liabilities +Stockholders' Equity a. b(2)

Explanation / Answer

Accounting equation :

Assets = Liabilities + Stockholder's equity a. Account receivable (440) Allowance for doubtful accounts (440) b(1) Account receivable 440 Allowance for doubtful accounts 440 b(2) Cash 440 Account receivable (440)

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