On December 31, 2013, Russell Co. estimated that 4% of its net sales of $424,600
ID: 2426811 • Letter: O
Question
On December 31, 2013, Russell Co. estimated that 4% of its net sales of $424,600 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 $2,123. 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.)Explanation / Answer
Journal Entries:
Date
Accounts Titles and Explanations
Debit
Credit
Dec. 31, 2013
Bad Debts Expense
$ 16,984.00
Allowance for Doubtful debts (424600*4%)
$ 16,984.00
(Being Allowance made for doubtful debts)
May. 11, 2014
Allowance for Doubtful debts
$ 2,123.00
Accounts Receivables - B. Vetter
$ 2,123.00
(Being uncollectible account written off)
June. 12, 2014
Accounts Receivables - B. Vetter
$ 2,123.00
Allowance for Doubtful debts
$ 2,123.00
(Being account reinstated)
Cash
Accounts Receivables - B. Vetter
$ 2,123.00
(Being payment received)
$ 2,123.00
Journal Entries:
Date
Accounts Titles and Explanations
Debit
Credit
Dec. 31, 2013
Bad Debts Expense
$ 16,984.00
Allowance for Doubtful debts (424600*4%)
$ 16,984.00
(Being Allowance made for doubtful debts)
May. 11, 2014
Allowance for Doubtful debts
$ 2,123.00
Accounts Receivables - B. Vetter
$ 2,123.00
(Being uncollectible account written off)
June. 12, 2014
Accounts Receivables - B. Vetter
$ 2,123.00
Allowance for Doubtful debts
$ 2,123.00
(Being account reinstated)
Cash
Accounts Receivables - B. Vetter
$ 2,123.00
(Being payment received)
$ 2,123.00
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