Additional Exercise 196 Date Account Titles and Explanation Debit Credit Aug. 10

Question

Additional Exercise 196

Date

Account Titles and Explanation

Debit

Credit

Aug. 10

Sept. 12

Oct. 10

(To reinstate Sue King account previously written off)

(To record collection on account)

Nov. 15

Date

Account Titles and Explanation

Debit

Credit

Dec. 31

Additional Exercise 196

Fleming Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 1% of net credit sales will eventually be uncollectible. Selected account balances at December 31, 2014, and December 31, 2015, appear below:
12/31/14 12/31/15 Net Credit Sales $400,000 $500,000 Accounts Receivable 60,000 80,000 Allowance for Doubtful Accounts 5,200 ?

Explanation / Answer

1.

2. Adjusting journal entry to record the bad debt provision for the year ended December 31, 2015.

3. Balance of Allowance for Doubtful Accounts at December 31, 2015 = $5,000

$5,200 - $800 - $3,700 + $800 + $5,000 = $5,000

"It would be appreciated if you give your feedback"

Date Account Titles and Explanation Debit Credit Aug. 10 Allowance for Doubtful Accounts $800 Accounts Receivable—Sue King $800 (To write off Sue King account) Sept. 12 Allowance for Doubtful Accounts $3,700 Accounts Receivable—Tom Young $3,700 (To write off Sue King account) Oct. 10 Accounts Receivable—Sue King $800 Allowance for Doubtful Accounts $800 (To reinstate Sue King account previously written off) Cash $500 Accounts Receivable—Sue King $500 (To record collection on account) Nov. 15 Cash $300 Accounts Receivable—Sue King $300 (To record collection on account)

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