1 answer

** accounts receivable 575,000 allowance for DA 7500 B. Dec 31, 2015 the company estimated bad...

Question:

B. Dec 31, 2015 the company estimated bad debts as 3% of Account Receivable. Feb 15, 2016, the company determined that it can

** accounts receivable 575,000
allowance for DA 7500
At December 31, 2015, Ingleton Company reports the following results for the year Cash sales Credit sales ... $1.025.000 1,34
B. Dec 31, 2015 the company estimated bad debts as 3% of Account Receivable. Feb 15, 2016, the company determined that it can not collect $15,000 of its account receivable from customer Aldo April 1, 2016, the company received the payment $15,000 from Customer Aldo Account Title Debit Credit Date De 31 Feb 15 Oven TTTT
At December 31, 2015, Ingleton Company reports the following results for the year Cash sales Credit sales ... $1.025.000 1,342,000 In addition, its unadjusted trial balance includes the following items: Accounts receivable. Allowance for doubtful accounts. $575,000 debit 7.500 credit

Answers

Target balance = Accounts receivable × 3% = 575,000 × 3% = 17,250

Bad debt expense = Target balance – Allowance for doubtful accounts (credit)

                              = 17,250 – 7,500

                              = 9,750

Journals are as below:

Date

Account titles and explanations

Ref.

Debit

Credit

Dec. 31

Bad debt expense

$9,750

            Allowance for doubtful accounts

$9,750

To record bad debt expense at the year-end

Feb. 15

Allowance for doubtful accounts

$15,000

           Accounts receivable

$15,000

To record write-off of accounts receivable.

April. 1

Accounts receivable

$15,000

          Allowance for doubtful accounts

$15,000

To record re-establishing the earlier write-off

Cash

$15,000

       Accounts receivable

$15,000

To record receiving of accounts receivable

.

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