On December 31, 2013, Russell Co. estimated that 4% of its net sales of $410,600

Question

On December 31, 2013, Russell Co. estimated that 4% of its net sales of $410,600 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. On May 11, 2014, Russell Co. determined that the B. Vetter account was uncollectible and wrote off $2,053. On June 12, 2014, Vetter paid the amount previously written off.

Prepare the journal entries on December 31, 2013, May 11, 2014, and June 12, 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit Dec. 31, 2013 May 11, 2014 June 12, 2014 (To reinstate the account written off).

Explanation / Answer

Dec 31, 2013 Bad Debts Expense Dr 16424
Allow for Doubtful Accts Cr 16424
(Bad debt allow 4%*$410,600 =16424)

May 11, 2014 Allow for Doubtful Accts Dr 2053
Acct Rxbale-B Victor Cr 2053
(B Vetter uncollecible ritten off)

Jun 12, 2014 Cash Dr 2053
Allow for Doubtful Accts Cr 2053
(To reinstate the account written off)

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