Question

lemid=1062726 21 pCWTTIORES BO cum Tubbs Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 1% of net credit sales will eventually be uncollectible. Selected account balances af December 31, 2019, and December 31, 2020. appear below Net Credit Sales Accounts Receivable Allowance for Doubtful Accounts 12/31/19 12/31/20 $300,000 $400,000 60.000 80.000 4,800 - Your answer is partially correct. Record the following events in 2020. Credit account dies are automatically indented when the amount is need. Do not indem e n olas ALE 10. Determined that the account of Young for 5600 is uncollectible Sept. 12 Determined that the account of E Ford for $3.400 uncollectible Oct 10 Received a check for $400 as payment court From Yours whose account had previously be collectible Sheina caled the r ainder of the said in the Nov 15 Received check for $200 from Youngs t er Debit Date Account Titles and Explanation

Answer 1

The journal entries to be booked will be:

Date	Description	Debit ($)	Credit ($)	Workings
Aug-10	Allowance for doubtful accounts	600		given
	Accounts Receivables - L Young		600
Sep-12	Allowance for doubtful accounts	3,400		given
	Accounts Receivables - E Ford		3,400
Oct-10	Accounts Receivables - L Young	600		restatement of receivables
	Allowance for doubtful accounts		600
Oct-10	Cash	400		given
	Accounts Receivables - L Young		400
Nov-15	Cash	200		given
	Accounts Receivables - L Young		200

Notes

Alternately we can also book 2 entries for restating L Young receivables, one on Oct 10 for $400 and another on Nov 15 for $200.

When a company uses allowance method for booking its doubtful accounts, the receivables are written off using the Allowance for Doubtful accounts.