1. Present entries to record the following for a business that uses the Allowance Method: a) Record the adjusting entry at 12/31/19, the end of the fiscal year to provide for doubtful accounts. The accounts receivable account has a balance of $100,000 and the contra asset account, before adjustment has a debit balance of $700. Analysis of receivables indicates doubtful accounts of $4,500 b) In March of the following fiscal year $610 owed by the Filthy Disgusting Yankees Inc was written off. c) Six months later the $610 is reinstated and payment of that amount received 2. What is the estimated realizable value of the accounts receivable as reported on the Balance Sheet prepared as of 12/31/19 3. Assuming that the business had been following the direct write off method for accounting for uncollectibles, present the entry to record the write-off in (1b) 4. Record the entry for the reinstatement of the account written off in (3) under the direct write-off method
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
1. Present entries to record the following for a business that uses the Allowance Method:
a) Record the
b) In March of the following fiscal year $610 owed by the Filthy Disgusting Yankees Inc was written off.
c) Six months later the $610 is reinstated and payment of that amount received
2. What is the estimated realizable value of the accounts receivable as reported on the Balance Sheet prepared as of 12/31/19
3. Assuming that the business had been following the direct write off method for accounting for uncollectibles, present the entry to record the write-off in (1b)
4. Record the entry for the reinstatement of the account written off in (3) under the direct write-off method
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