At the end of 2017, Carpenter Co. has accounts receivable of $719,300 and an all
ID: 2515293 • Letter: A
Question
At the end of 2017, Carpenter Co. has accounts receivable of $719,300 and an allowance for doubtful accounts of $64,800. On January 24, 2018, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $6,000.
Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
list of accounts:
Accounts Payable
Accounts Receivable
Allowance for Doubtful Accounts
Bad Debts Expense
Buildings
Cash
Cost of Goods Sold
Income Summary
Interest Receivable
Interest Revenue
Inventory
Land
Maintenance and Repairs Expense
Notes Payable
Notes Receivable
Other Operating Expenses
Prepaid Insurance
Sales Discounts
Sales Returns and Allowances
Sales Revenue
Service Charge Expense
Supplies
Supplies Expense
What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?
Explanation / Answer
Answer
A.
The journal entry to record the write-off:
Dr - allowance for doubtful accounts - 6000
Cr - accounts receivable - 6000
B. The cash realizable value of the accounts receivable:
1.
Before Write-off - 654500 (719300-64800)
2.
After Write-off - 654500 (719300-6000)-(64800-6000)
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