Question - The following transactions were completed by Clark Management Company during the fiscal year ended Dec 31
July 5 Received 70% of the 21,000 balance owed by Dockins Co, a bankrupt business, and wrote off the remainder as uncollectibe.
Sep 21 Reinstate the account of Bart Tiffany, which had been written off in the preceding year as uncollectible. Journalized the receipt of 4875 cash in full payment of Tiffany's account
Oct 19 Wrote off the 6275 balance owed by Ski Time Co which has assets
Nov 6 Reinstated the account of Kirby Co, which had been written off in the preceding year as uncollectible. Journalized the receipt of 4750 cash in full payment of the account.
Dec 31 Wrote off the following accounts as uncollectible (compound entry) Maxie Co 2150, Kommers Co 3600 Helena Distributors 5500 Ed Ballantyne 1750
Dec 31 Based on an analysis of the 815,240 of accounts receivable. it was estimated that 16750 will be uncollectible. Journalize the adjusting entry..
Instructions -
1. Record the Jan 1 credit balance of 12550 in a T Account for Allowance for Doubtful accounts.
2. Journalize the transactions. Post each entry that affects the following selected T-accounts and determine the new balances.
Allowance for Doubtful Accounts
Bad debt expense.
3. Determine the expected net realizable value of the accounts receivable as of Dec 31
4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on Dec 31 had been nased on an estimated expense of 1/4 to 1% of the net sales of $7,126,000 for the year, determine the following:
a. Bad debt expense for the year.
b. Balance in the allowance account after the adjustment of Dec 31
c. expected net realizable value of the accounts receivable as of Dec 31