Direct Write-Off Method

Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables:

Oct. 2: Received $2,250 from Matthew Chapman and wrote off the remainder owed of $2,050 as uncollectible. If an amount box does not require an entry, leave it blank.

Oct. 2

Dec. 20: Reinstated the account of Matthew Chapman and received $2,050 cash in full payment.

Dec. 20-Reinstate

Dec. 20-Collection

Allowance Method

Journalize the following transactions, using the allowance method of accounting for uncollectible receivables:

Oct. 2. Received $2,230 from Paula Spitler and wrote off the remainder owed of $2,830 as uncollectible. If an amount box does not require an entry, leave it blank.

Oct. 2

Dec. 20. Reinstated the account of Paula Spitler and received $2,830 cash in full payment.

Reinstate

Collection

Percent of Sales Method

At the end of the current year, Accounts Receivable has a balance of $585,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,630,000. Bad debt expense is estimated at 1/2 of 1% of sales.

a. Determine the amount of the adjusting entry for uncollectible accounts. $

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

	Adjusted Balance Debit (Credit)
Accounts Receivable	$
Allowance for Doubtful Accounts	$
Bad Debt Expense	$

c. Determine the net realizable value of accounts receivable. $