> Moving to another question will save this response. Question 6 On Deoomber 31,

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> Moving to another question will save this response. Question 6 On Deoomber 31, 2016, when the Allowance tor Doubttul Accounts had a debit balance or S2.000, Jade company estimates the 4% ts accounts receivable balance or S125,000 will become uncollectible. On March 31, 201, Jade company determined that William James account in the amount of $2,150 was uncollectible. On May 15, 2107 William paid the amount previously written off 1) What entry would you make on December 31,2016 for the Allowance Account DEBIT 2) What entry would you make on March 3, 2017 DEBIT 3) What entry would you make on May 15,2017 DEBIT DEBIT 4) How would your answer changc tor Doccmber 21, 2016, it the Allowance tor Doubtul Accounts had a croait balance 01 $2,100 DEBIT CREDIT AMOUNT CREDIT AMOUN CREDIT AMOUNT CREDIT AMOUNT CREDIT AMOUNT Moving to another question will save this response.

Explanation / Answer

Journal Entries :-

working note 1:-

Bad Debt Expense = Opening Balance of Allowance + Current Year estimate

= $2000 + ($125000*4%)

= $2000 + $5000

= $7000

Working Note 2 :-

Bad Debt Expense = Opening Balance of Allowance + Current Year estimate

= ($2100) + ($125000*4%)

= ($2100) + $5000

= $2900

Date Particulars Debit ($) Credit ($) Dec. 31, 2016 Bad Debt Expense a/c Dr. (Working Note 1) 7000 To Allowance for Doubtful A/c 7000 Mar 3, 2017 Allowance for doubtful A/c Dr. 2150 To Accounts Receivable A/c 2150 May 15, 2017 Accounts Receivable A/c Dr. 2150 To Allowance for doubtful A/c 2150 May 15, 2017 Cash A/c Dr. 2150 To Accounts Receivable A/c 2150 Dec 31, 2016 Bad Debt Expense A/c Dr. (Working note 2) 2900 To Allowance for Doubtful A/c 2900

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