Question

At December 31, 2018, the trial balance of Hossam Company contained the following amounts before adjustments Debits Credits Accounts Receivable 1 $200,000 Allowance for Doubtful Accounts 1,500 Sales $400,000 Instructions: 1. Prepare the adjusting entry at December 31, 2018, to record bad debt expense if the company estimates that 6% of accounts receivable will be uncollectible. 2. Prepare the adjusting entry at December 31, 2018, to record bad debt expense if the company estimates that 3% of sales will be uncollectible. 3. Show the balance sheet presentation of accounts receivable at December 31, 2018 under assumption (1) above. 4. On January, 2019, a $1000 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off. 5. On March 30, 2019, a $750 of the account that was written off on January, was collected. Prepare the journal entries to record that recovery. 6. Repeat part (4) above assuming that the company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.

Answer 1

Hossam Company Downal entries for following transactions 1. ACCOUNG Receivables = $ 200,000 64. Of Receivable will un collectable 2018 dec,31 10,500 Bad debe expen Sea Alc - DV 10,500 To Allowance for doubtful debtale (C200,000x6%.) . 1.500) 2. sales $400,000 34. Of Saly un collectable = 12.000 C$400,000 X34) 2018 dec, 3) Bad debt Expen se All - Dr $10,500 $10,500 TO Allowance for doubt full debt Ak C $12000 - $1500) 3. 2018 dec, 3) en Balance sheet Cursent Assets Account Receivables $200,000 lews: Allawang for double dobe ($ 19.000) C10.50-1500) 4188,000

L. Jong Jan. $1000 Allowance for doubtful debe All TO ACCOUnt Receivable. Ale $1006 2019 MOS, 30 $450 $750 Boud Cash/Bank All - Dr To Band debts Recovery Ale (Bering Recovery of Bad delbsts ) G. $1000 Bad debt Exp Ale - Dr $1000 TO Account Receivables Ale (under the disech coritten off niethod. un collectable Amount treated as bad debts.). if any clarification please comment. Please do like ..., Happy HomeworkLibing