On December 31, 2016, when its Allowance for Doubtful Accounts had a credit bala

Question

On December 31, 2016, when its Allowance for Doubtful Accounts had a credit balance of S 1,500, Leeds Company estimates that 6% of its accounts receivable balance of $95,000 will become uncollectible. On March 3, 2017, Leeds Company determined that Megan Jost's account of $950 was uncollectible. On May 15, 2017, Jost paid the amount previously written off Prepare the journal entries for December 31, 2016, March 3, 2017 and May 15, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 201 Mar. 3, 2017 May 15 (To reinstate an account previously written off) May 15 (To record payment on account in full)

Explanation / Answer

Journal Entries

Date Particulars Debit Credit 31.12.2016 Account Receivable Dr. 1500 To Provision of Allowance for Doubtful Accounts 1500 (Being credit balance recorded) 03.03.2017 Allowance for Doubtful Debts Dr. 950 To Account Receivable 950 (Being a debt is actually determined as uncollectible) 15.05.2017 Accounts Receivable Dr. 950 To Allowance for Doubtful Debts 950 (Being reverse the written off) Cash Dr. 950 To Accounts Receivable 950 (Being collection recorded)

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