Allowance method entries The following transactions were completed by Wild Trout

Question

Allowance method entries

The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31:

Required:

1. Record the January 1 credit balance of $53,300 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.

2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $1,288,000 balance in accounts receivable reflects the adjustments made during the year.

Jan. 19. Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalize the receipt of $2,540 cash in full payment of Arlene’s account. Apr. 3. Wrote off the $14,550 balance owed by Premier GS Co., which is bankrupt. July 16. Received 25% of the $26,100 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. Nov. 23. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,140 cash in full payment. Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $10,945 ; Fogle Co., $3,250 ; Lake Furniture, $ 8,355 ; Melinda Shryer, $2,360. Dec. 31. Based on an analysis of the $1,288,000 of accounts receivable, it was estimated that $56,000 will be uncollectible. Journalize the adjusting entry.

Explanation / Answer

1)

2)

**Unadjusted balance in allowance account =53300+[2540+4140]Reinstated- [14550+19575+24910] write off

    = 945

Allowance for Doubtful Accounts. Beginning balance 53300

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