On January 1 of this year, Nielsen Company had a credit balance of $ 1,705 in Allowance for Doubtful Accounts. During the year, Nielsen Company completed the following selected transactions:
Feb. 11 Wrote off as uncollectible a $ 694 account of Noble Company, which had gone out of business, leaving no assets.
May 5 Wrote off the account of C. Tapia as uncollectible, $ 348.32.
19 Received $ 189 unexpectedly from C. Woodward, whose account had been written off two years earlier in the amount of $ 189. Reinstated the account and recorded the collection of $ 189.
Aug. 3 Collected 10 percent of the $ 269 owed by A. E. Moses, a bankrupt customer. Wrote off the remainder as worthless.
Sept. 24 Received $ 195 from C. Tapia as partial payment of the account written off on May 5. He wrote a letter stating that he expects to pay the balance soon. Accordingly, reinstated the account for the amount of the original obligation, $ 348.32.
Dec. 29 Journalized a compound entry to write off the following accounts as uncollectible: N. C. Ashley, $ 372.40; R. L. Bean, $ 248.72; C. Estes, $ 288.00.
31 Recorded the adjusting entry for estimated bad debts expense at ½ percent of net sales of $ 201,415.
31 Closed the Bad Debts Expense account.
1. Record the opening balance in the ledger account for Allowance for Doubtful Accounts (account no. 114).
2. Record the entries in a general journal, pages 73 and 74.
3. Post the entries to the ledger accounts for Allowance for Doubtful Accounts and Bad Debts Expense (account no. 642).