1, On December 31, 2016, when its Allowance for Doubtful Accounts had a debit ba
ID: 2396256 • Letter: 1
Question
1, On December 31, 2016, when its Allowance for Doubtful Accounts had a debit balance of $1,443, Novak Corp. estimates that 7% of its accounts receivable balance of $98,700 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. 2. On May 11, 2017, Novak Corp. determined that B. Jared's account was uncollectible and wrote off $1,090 3. On June 12, 2017, Jared paid the amount previously written off. Prepare the journal entries on December 31, 2016, May 11, 2017, and June 12, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit 1. 2. 3. (To reinstate account previously written off)Explanation / Answer
No Date Accounts Title Dr Cr 1 Dec 31 2016 Bad debt expenses $8352 Allowance for Doubtful Accounts 8352 (98700*7%)+1443 (dr bal) (being bad debt espenses recorded) 2 May 11 2017 Allowance for Doubtful Accounts $1,090 Accounts Receivable $1,090 (being uncollectible accounts written off) 3 Jun 12 2017 Accounts Receivable $1,090 Allowance for Doubtful Accounts $1,090 (being account reinstated) Cash $1,090 Accounts Receivable $1,090 (being amt collected) If any doubt please comment. If satisfied you can rate
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