Question

On January 1 of this year, Carter Company had a credit balance of $718 in Allowance for Doubtful Accounts. During the year, Carter Company completed the following transactions: Apr. 2 Wrote off the account of S. Bang as uncollectible, $1,327. Oct. 14 Received $765 unexpectedly from K. Parks, whose account had been written off one year earlier in the amount of $765. Reinstated the account and recorded the collection of $765. Dec. 2 Collected 10 percent of the $1,810 owed by R. Stone, a bankrupt customer. Wrote off the remainder as worthless. 3 Journalized a compound entry to write off the following accounts as uncollectible: G. Gold, $384; W. Karchner, $1,370; B. Crantz, $915. 31 Recorded the adjusting entry for estimating bad debt losses at 1/2 percent of net credit sales of $286,558. Instructions: Record the entries in a general journal (page 18).

Answer 1

Solution: Date Apr 2 Account title Allowance for doubtful accounts Account receivable (To record accounts written off) Debit Credit 1327 1327 Oct 14. 765 Account receivable Allowance for doubtful accounts (To record reinstatement of account) 765 Cash Account receivable (to record collection) 765 TT 765 Dec 2. 1811 1629 Cash=1810*10% Allowance for doubtful accounts Account receivable (to record collection and writting off accounts) 1810 Dec 3. 2669 2669 Allowance for doubtful accounts Account receivable (384+1370+915) (To record accounts written off) 1433 Dec 31. Bad debts expense Allowance for doubtful accounts |(286558*0.5%)