Reference no: EM132998009
Allowance method entries
The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31:
Jan. 19. Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1,940 cash in full payment of Arlene's account.
Apr. 3. Wrote off the $11,120 balance owed by Premier GS Co., which is bankrupt.
July 16. Received 30% of the $19,900 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible.
Nov. 23. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $3,160 cash in full payment.
Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $8,360 ; Fogle Co., $2,485 ; Lake Furniture, $ 6,385 ; Melinda Shryer, $1,805.
Dec. 31. Based on an analysis of the $982,100 of accounts receivable, it was estimated that $42,700 will be uncollectible. Journalized the adjusting entry.
Required:
Problem 1. Record the January 1 credit balance of $40,700 in a T account presented for Doubtful Accounts.
Problem 2. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $982,100 balance in accounts receivable reflects the adjustments made during the year.
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