Auto? Parts, Inc., completed the following selected transactions during 2016: So

Question

Auto? Parts, Inc., completed the following selected transactions during 2016:

Sold inventory to Walter Viller, $700, on account. Ignore cost of goods sold. Wrote off the Walter Viller account as uncollectible after repeated efforts to collect from him. Received $300 from Walter Viller, along with a letter stating his intention to pay within 30 days. Reinstated his account in full. Received the balance due from Walter Viller. Made a compound entry to write off the following accounts as uncollectible: Barry Krisp, S500; Marie Monet, $200; and Trixie Wheater, $470. Jan 17 Jun 29 Aug 6 Sep 4 Dec 31 Dec 3 Based on an aging of accounts receivable, estimated uncollectible accounts as $3,800.

Explanation / Answer

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Date General Journal Debit Credit Jan. 17 Accounts receivable 700 Sales revenue 700 (To record sales on account) Jun. 29 Allowance for uncollectible accounts 700 Accounts receivable 700 (To record write-off of uncollectible account) Aug. 6 Accounts receivable 700 Allowance for uncollectible accounts 700 (To re-instate account receivable) Aug. 6 Cash 300 Accounts receivable 300 (To record collection on account) Sep. 4 Cash 400 Accounts receivable 400 (To record collection on account) Dec. 31 Allowance for uncollectible accounts 1170 Accounts receivable 1170 (To record write-off of uncollectible accounts) Dec. 31 Bad debt expense 1770 Allowance for uncollectible accounts 1770 (To record bad debt expense)

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