WL, Inc. provided for uncollectible accounts receivable under the allowance meth

Question

WL, Inc. provided for uncollectible accounts receivable under the allowance method. The balance in Allowance for Doubtful Accounts was a credit of $80,000 at January 1, 2015 and the balance in Accounts Receivable was $900,000. During 2015, credit sales totaled $22,400,000, collections from customers totaled $21,800,000, monthly interim provisions for doubtful accounts were made at .05% of credit sales, $160,000 of bad debts were written off, and recoveries of accounts previously written off amount to $20,000. At December 31, 2015, WL, Inc. estimates that 3% of the balance in Accounts Receivable is uncollectible and recorded a corresponding adjusting entry. Provide summary journal entries to reflect the above transactions and adjusting entries.

Explanation / Answer

WL, Inc. provided for uncollectible accounts receivable under the allowance meth

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