Exercise 9-5 At December 31, 2016, Finzelberg Company had a credit balance of $1

Question

Exercise 9-5 At December 31, 2016, Finzelberg Company had a credit balance of $15,000 in Allowance for Doubtful Accounts. During 2017, Finzelberg wrote off accounts totaling $11,000. One of those accounts ($1,500) was later collected. At December 31, 2017, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $22,000. Prepare journal entries to record the 2017 transactions of Finzelberg Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually Account Titles and Explanation Debit Credit (To record amount written off) (To reverse write-off) (To record collection of writeoff) (To record estimated bad debts for the year) Question Attempts: 0 of 5 used

Explanation / Answer

Solution:

Journal Entries

Account Titles and Explanation

Debit

Credit

Allowance for Doubtful Accounts

$11,000

Accounts Receivable

$11,000

(Accounts wrote off recorded)

Accounts Receivable

$1,500

Allowance for Doubtful Accounts

$1,500

(Reverse wrote off recorded)

Cash

$1,500

Accounts Receivable

$1,500

(Collection recorded)

Bad Debt Expense (Note 1)

$16,500

Allowance for Doubtful Accounts

$16,500

(Estimated bad debt for the year recorded)

Note 1 –

Allowance for Doubtful Account

Allowance for Doubtful Accounts

Accounts Receivable (Wrote off)

$11,000

Beginning Balance

$15,000

Accounts Receivable (Reverse wrote off)

$1,500

Ending Balance

$22,000

Bad Debt Expense for the year (Balancing Figure)

$16,500

$33,000

$33,000

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Account Titles and Explanation

Debit

Credit

Allowance for Doubtful Accounts

$11,000

Accounts Receivable

$11,000

(Accounts wrote off recorded)

Accounts Receivable

$1,500

Allowance for Doubtful Accounts

$1,500

(Reverse wrote off recorded)

Cash

$1,500

Accounts Receivable

$1,500

(Collection recorded)

Bad Debt Expense (Note 1)

$16,500

Allowance for Doubtful Accounts

$16,500

(Estimated bad debt for the year recorded)

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