On December 31, 2014, Extreme Fitness has adusted balances of $860,000 in Accoun

Question

On December 31, 2014, Extreme Fitness has adusted balances of $860,000 in Accounts Receivable and 567 000 in Allowance for Doubtlul Accounts. On January 2, 2015, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $16,000 a. What amount would the company report as its net accounts recetvable on December 31, 2014? b. Prepare the journal entry to write off the accounts on January 2, 2015. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account fileld.) View transaction list Journal entry worksheet Record the $16,000 write-off of certain customer accounts which are not collectible. Note: Enter debits before credts Date January 02. 2015 Debit Credic General Journal Type here to search bp

Explanation / Answer

Req a: Net Accounts receivable on Dec31: Accounts receivable (Gross) 860,000 Less: Allowance for doubtful debts 67,000 Net Accounts receivable (net) 793,000 Journal entry: Allowance for doubtful debt Account Dr. 16000        Accounts receivable 16000 Net Accounts receivable on Jan 2: Accounts receivable (Gross) 844000 Less: Allowance for doubtful debts 51000 Net Accounts receivable on Jan 2: 793000

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