Based on an analysis of the 257,724 of accounts receivable, it was estimated that 14,500 will be uncollectible. Record the adjusting entry. Record the adjusting entry assuming the aging method was used.
|
Based on an analysis of the 257,724 of accounts receivable, it was estimated that 14,500 will be uncollectible. Record the adjusting entry. Record the adjusting entry assuming the aging method was used.
I am no expert, but this is how it seems:
Credit Accounts Receivable with 14,500
Debit Bad Debt Expense with 14,500
What you need to do is toQuote:
Originally Posted by huron2
Dr.Bad debts expense... 14500
Cr.Allowance for doubtful accounts... 14500
This is assuming you don't have any previous debits and credit in alowance for daubtful accounts,Because if you do the values would be different.
Another thing you don't affect accounts receivables, unless, increasing accounts receivable, getting pay, transpasing any amount to notes receivables,or you are writing off an account, remember you are just estimating how much you think the company won't be able to collect at the end of the period or accounts muturity,Quote:
Originally Posted by terryg752
The original question is: Reinstated the account of mike and co which was previoulsy written off for 1250. Collected cash 1250.Wrote of balance 2375 owed helen which has no assets. Received 25% of 12000 owed by mr jeff and wrote off remaining balance. Based on analysis of the 257,724 of accounts receivable, it was estimated that 14500 will be uncollectible. Record the adjusting entry . Record the adjusting entry assumig the aging method was used. Allowance for doubful account has a beginning bal of 12,200 credit. And the account receviable has a balance of 272099
To reinstated the accountQuote:
Originally Posted by huron2
Dr.Accounts receivables... 1250
Cr.Allowance for doubtful accounts... 1250
To record the payment
Dr.Cash... 1250
Cr.Accounts receivable... 1250
To ecord the wrote off
Dr.Allowance for doubtful accounts... 2,375
Cr.Accounts receivable... 2,375
To record partial payment
Dr.Cash... 3,000
Cr.Accounts receivable... 3,000
To record the wrote off
Dr.Allowance for doubtful accounts... 9,000
Cr.Accounts receivable... 9,000
Accounts receivables... Debit... Credit... Balance
... 272,099
... 1,250... 273,349
... 1,250... 272,099
... 2,375... 269,724
... 3,000... 266,724
... 9,000... 257,724
Allowance for doubful accounts... Debit... Credit... Balance
... (12,200)
... 1,250... (13,450)
... 2,375... (11,075)
... 9,000... (2,075)
... 12,425... (14,500)
() means credit balance
To record the adjustment
Dr.Bad debts expense... 12,425
Cr.Allowance for doubtful accounts... 12,425
Hope this help you.
How did you get the 12425 bal in allowance for doubtful account . And why is the bad debt expense 12425 instead of 14500.Thanks for all your help.
Your ending balance for allowance for doubtful accounts has to be 14,500, but after doing all the reinstaments and wrote off you have a credit balance of 2,075 for allowance for doubtful accounts so you need to do adjustment to show a balance of 14,500 for doubtful accounts then 14,500 - 2,075= 12,425 which is a credit to allowance for doubtful accounts then 2,075 + 12,425= 14,500 which is the expected balance for doubtful accounts. So when you do the adjustment in the journal you Dr.Bad debts expense and Cr.Allowance for doubtful accounts for 12,425.Quote:
Originally Posted by huron2
Remember you are using the aging method for receivable accounts, and the problem is giving you the balance for doubtful accounts after adjusments.
The reason because the bad debts expense is 12,425 is because it needs to be debit it for the same amount that ADAccounts is being credit it.Also remember the 14,500 is the ending balance for ADAccounts, and is not going to be same as Bad debts expense because this is not the first period of operations of the company, and because bad debts expense is only a temporary account that is close at the end of each period.
Since you said it is ESTIMATED~~~~ there are only allowance method to record, not for the direct-method
Direct-method will not estimate any bad debt expense before confirm the bad debt expense
So, u should record it as
Dr doubtful debt expense / bad debt expense 14500
Cr allowance for doubtful debt 14500
Then there are nothing changes in account receivable, but only record the estimated expense into the income statement and credit 14500 more into the allowance for doubtful debt in the balance sheet
The thread is two years old.
Wakaka~~~~ I just see it
XD
| All times are GMT -7. The time now is 02:19 PM. |