Based on your inquiries, you note that $67,000 of accounts receivable had been written off during the
Question:
Based on your inquiries, you note that $67,000 of accounts receivable had been written off during the year. The clerk had debited bad debt expense for $67,000 and credited Accounts Receivable for $67,000. When $15,000 of accounts previously written off had been collected, the accountant debited cash and credited sales. The company uses the allowance method based on the aging of accounts receivable. Based on this method, DeeDee determines that uncollectible accounts are $81,000 at the end of 2017.
a. How would I correct the information given above to obtain the correct adjusting journal entry? Combine journal entries when possible.
b. Using the allowance method based on the aging of accounts receivables, should the $67,000 be debited to bad debt expense or to Allowance for doubtful accounts, mentioned above?
c.Is $81,000 the ending balance for uncollectible accounts?
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield