At year end, Allowance for Doubtful Accounts was estimated to need a balance of
ID: 2571450 • Letter: A
Question
At year end, Allowance for Doubtful Accounts was estimated to need a balance of $51,000. This estimate is based on an analysis of aged accounts receivable.
Prepare all necessary journal entries for Windsor Inc. to reflect the information above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
The statement of financial position of Windsor Inc. at December 31, 2016, includes the following: Notes receivable $288,500 Accounts receivable 285,300 Less: Allowance for doubtful accounts (46,600 ) $527,200Transactions in 2017 include the following: 1. Accounts receivable of $149,000 were collected. This amount includes gross accounts of $51,800 on which 2% sales discounts were allowed. 2. An additional $16,700 was received in payment of an account that was written off in 2017. 3. Customer accounts of $40,000 were written off during the year. 4.
At year end, Allowance for Doubtful Accounts was estimated to need a balance of $51,000. This estimate is based on an analysis of aged accounts receivable.
Prepare all necessary journal entries for Windsor Inc. to reflect the information above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Explanation / Answer
Journal entries Transaction no. Account Titles Debit Credit 1 Cash $147,964 Discount allowed $1,036 Accounts Receivable $149,000 (recording of accounts receivables collected) 2 Accounts Receivable $16,700 Allowance for doubtful debts $16,700 (recording of AR written off now reinstated) Cash $16,700 Accounts Receivable $16,700 (recording of reinstated AR received) 3 Allowance for doubtful debts $40,000 Accounts Receivable $40,000 (recording of AR written off) 4 Bad debt Expenses $27,700 Allowance for doubtful debts $27,700 (recording of bad debt expense for the year)
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