Respuesta :
Answer:
1-a. Complete the Accounts Receivable and Allowance for
Doubtful Accounts T-accounts to determine the balance sheet values.
Dr Bad Debt Expense $ 4.775
1-c. Complete the amounts related to Accounts Receivable and
Bad Debt Expense that would be reported on the BALANCE SHEET for the current year.
Cr Allowance for Uncollectible Accounts $ 6.190
Dr Accounts Receivable $ 57.147
Explanation:
- Initial Balance
Dr Accounts Receivable $ 48.283
Cr Allowance for Uncollectible Accounts $ 8.474
Dr Accounts Receivable NET $ 39.809
- Sales on account were
Dr Accounts Receivable $ 306.673
Sales $ 306.673
- Collections on account
Dr Cash $ 290.750
Cr Accounts Receivable $ 290.750
- Write-offs of bad debts
Dr Allowance for Uncollectible Accounts $ 7.059
Cr Accounts Receivable $ 7.059
- Bad debt expense adjustment
Dr Bad Debt Expense $ 4.775
Cr Allowance for Uncollectible Accounts $ 4.775
- 1-a. Complete the Accounts Receivable and Allowance for
Doubtful Accounts T-accounts to determine the balance sheet values.
Dr Bad Debt Expense $ 4.775
- 1-c. Complete the amounts related to Accounts Receivable and
Bad Debt Expense that would be reported on the BALANCE SHEET for the current year.
Cr Allowance for Uncollectible Accounts $ 6.190
Dr Accounts Receivable $ 57.147
Accounts Rec
$ 48.283 Debit Initial Balance
$ 306.673 Debit Sales
$ 290.750 Credit Collections
$ 7.059 Credit Write Off
$ 57.147 DEBIT Balance
Allowance for Doubtful Accounts
$ 8.474 Credit Initial Balance
$ 7.059 Debit Write Off
$ 4.775 Credit Bad Debt Adj.
$ 6.190 CREDIT Balance
Bad accounts are those credits granted by the company and there is no possibility of being charged.
When customers buy products on credits but the company cannot collect the debt, then it's necessary to cancel the unpaid invoice as uncollectible.
One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets
The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.
When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)
At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit) with accounts receivable (credit), with this we are recognizing the bad credit of the company.
