The following transactions were completed by The Irvine Company during the curre

Question

The following transactions were completed by The Irvine Company during the current fiscal year ended December 31: Feb. 8 Received 35% of the $18,600 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible. May 27 Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,445 cash in full payment of Seth’s account. Aug. 13 Wrote off the $6,375 balance owed by Kat Tracks Co., which has no assets. Oct. 31 Reinstated the account of Crawford Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,840 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,240; Bonneville Co., $5,575; Crow Distributors, $9,355; Fiber Optics, $1,035. Dec. 31 Based on an analysis of the $1,768,000 of accounts receivable, it was estimated that $35,360 will be uncollectible. Journalized the adjusting entry.

Explanation / Answer

journal entries

1. Cash Dr.6510

Bad debts dr. 12090

To Decoy co. 18600

2. Cash Dr.7445

To Bad debts recovery income 7445

3. Bad Debts dr. 6375

to Kat Tracks 6375

4. Cash dr. 3840

to Bad debts recovery income 3840

5. Bad debts dr. 23205

To newbouer 7240

toBonneville 5575

to crow distributors 9355

to Fiber optics 1035

6. Bad debts provision dr. 35360

to accounts receivable 35360

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