Question $2$

Allowance for Doubtful Accounts $(10$ marks$)$

The following information relates to$$Prime Corp.$$for the year$2024$:

Sales for $2024(75\%$ on credit$)$:$$$$8,500,000$

Accounts receivable as at Dec. $31,2024$:$$$$300,000$

Allowance for doubtful accounts as at Jan. $1,2024$:$$$$10,000$ CR

Prime estimates its bad debt expense during the year as$0\mathrm{.}4\%$of net credit sales. On June $15,2024,$ Prime unexpectedly collected$$$$5,000$of a previously written$-$off account.$$ Prime has a December $31$ year end.

Required:

a$.$ Record the journal entries for:

$$i$.$ The collection of the previously written$-$off account on June $15$;

$$ii$.$ Bad debt expense for the year.

b$.$ After the journal entries from a$)$ had been completed, management reviewed the balance in the allowance for doubtful accounts and determined that it should be$7\%$of gross accounts receivable.$$ Prepare the adjusting journal entry required. Please help me answer this in excel. Thank you so much