Reynolds.com uses the allowance method of accounting for bad debts. The company

ID: 2427440 • Letter: R

Question

Reynolds.com uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at year-end Calculate the total estimated bad debts Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in above. Assume the unadjusted balance in Allowance for Doubtful Accounts is $4,900 debit Of the above accounts, $5,200 is determined to be specifically uncollectable. Prepare the journal entry to write off the uncollectable account The company collects $5,200 subsequently on a specific account that had previously been determined to be uncollectable in part3. Prepare the journal entry(ies) necessary to restore the account and record the cash collection

Explanation / Answer

Debtors

Uncollectable

373,000

7,460

84,000

3,360

42,000

2,100

23,000

1,610

11,000

12%

1,320

Total estimated bad debts

15,850

B) Assume the unadjusted balance in the Allowance for Doubtful Accounts account is a $4,900 debit.
15,850 + 4,900 = 20,750
Dr Bad Debt Expense 20,750
Cr Allowance for Doubtful Accounts 20,750

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C).Of the above accounts, $5,200 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account
Dr Allowance for Doubtful Accounts 5,200
Cr Accounts Receivable 5,200

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D). The company collects $5,200 subsequently on a specific account that had previously been determined to be uncollectible in the question above. Prepare the journal entry(ies) necessary to restore the account and record the cash collection
Dr Accounts Receivable 5,200
Cr Allowance for Doubtful Accounts 5,200

Dr Cash 5,200
Cr Accounts Receivable 5,200