Question

CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK NEXT At the beginning of the current period, Nash's Trading Post, LLC had balances in Accounts Receivable of $201.400 and in Allowance for Doubtful Accounts of $8,570 (credit). During the period, it had credit sales of $840,400 and collections of $758,910. It wrote off as uncollectible accounts receivable of $8.026. However, a $2,889 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $23,180 at the end of the period. (Omit cost of goods sold entries.) (a) Prepare the entries to record sales and collections during the period. (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (C) Prepare the entries to record the recovery of the uncollectible account during the period. (d) Prepare the entry to record bad debt expense for the period. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (To record sales) (To record collection) (b) Vereine 24 162

Answer 1

Information Given -

At the beginning of the current period, Nash's Trading Post, LLC had balances -

Accounts Receivable = $201400

Allowance for Doubtful Accounts = $8570 (credit).

During the period, it had Net credit sales of $840400 and collections of $758910.

It wrote off as uncollectible accounts receivable of $8026. However, a $2889 account previously written off as uncollectible was recovered before the end of the current period.

Uncollectible accounts are estimated to total $23180 at the end of the period.

.

Answer - Part - (a) - Journal entries to record the sales and collections during the period -

No.	Account Titles and Explanation	Debit ($)	Credit ($)
(a)	Accounts receivable Sales revenue (To record sales)	840400 -	- 840400
	Cash Accounts receivable (To record collection)	758910 -	- 758910

.

Answer - Part - (b) - Journal entry to record the write-off of uncollectible accounts during the period -

No.	Account Titles and Explanation	Debit ($)	Credit ($)
(b)	Allowance for Doubtful Accounts Accounts receivable (To record uncollectible accounts written off)	8026 -	- 8026

.

Answer - Part - (c) - Journal entries to record the recovery of the uncollectible account during the period -

No.	Account Titles and Explanation	Debit ($)	Credit ($)
(c)	Accounts receivable Allowance for Doubtful Accounts (To reinstate account previously written off)	2889 -	- 2889
	Cash Accounts receivable (To record collection)	2889 -	- 2889

.

Answer - Part - (d) - Journal entry to record bad debt expense for the period -

No.	Account Titles and Explanation	Debit ($)	Credit ($)
(d)	Bad Debts Expense [ Refer working note - (1) for calculations ] Allowance for Doubtful Accounts (To adjust allowance for doubtful accounts to amount estimated to be uncollectible at the end of the period)	19747 -	- 19747

# Working note - (1) - Bad Debts Expense =

Particulars	Amount ($)
Beginning balance of Allowance for Doubtful Accounts	8570
Less - Write off amount	(8026)
Add - Reinstated amount	2889
Actual balance (8570 - 8026 + 2889)	3433
Uncollectible accounts	23180
Bad Debts Expense = ( Uncollectible accounts - Actual balance )	19747

.

Calculation of Ending balance of Accounts Receivable -

Particulars	Amount ($)
Beginning balance of Accounts receivable	201400
Add - Credit sales	840400
Less - Collections	(758910)
Less - Write off amount	(8026)
Add - Reinstated amount	2889
Less - Collections	(2889)
Ending balance of Accounts Receivable	274864

.

Calculation of Ending balance of Allowance for Doubtful Accounts -

Particulars	Amount ($)
Beginning balance of Allowance for Doubtful Accounts	8570
Less - Write off amount	(8026)
Add - Reinstated amount	2889
Add - Bad Debts Expense [ Refer working note - (1) for calculations ]	19747
Ending balance of Allowance for Doubtful Accounts	23180

.

Calculation of Net realizable value of the receivables at the end of the period -

= Ending balance of Accounts Receivable - Ending balance of Allowance for Doubtful Accounts

= $274864 - $23180

= $251684