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    vanray's Avatar
    vanray Posts: 1, Reputation: 1
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    #1

    Aug 15, 2006, 08:08 PM
    Journalize entries to record Allowance for doubtful accounts
    How would you journalize entries to record allowance for doubtful accounts using two different bases.

    The ledger of Elburn company at the end of the current year shows accounts receivalbe $110,000, Sales $840,000 and salaes Revenue and allowances $28,000.

    If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Elburn determines that Copp's $1,400 balances is uncollectibel.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Aug 16, 2006, 07:31 PM
    Direct write-off method:

    Dr. Bad Debt Expense 1,400
    Cr. AR 1,400
    ballin4eva113's Avatar
    ballin4eva113 Posts: 5, Reputation: 1
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    #3

    Jan 9, 2009, 09:56 AM

    How did you get this answer? And could you show me in a brief journal entry?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #4

    Jan 9, 2009, 12:35 PM

    There are two different ways to account for uncollectible accounts. The first way is the Percentage of Sales method and the Direct write-of method. Vanray's question was about the Direct Write-off method and the question stated that $1,400 was considered uncolletible. CaptainForest's journal entry is the proper way to record the uncollectible account for the Direct Write-off method.
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