The 12/31/13 unadjusted trial balance of a company disclosed the following balances: $\begin{array} { | l | l | l | }
\hline \text { Accounts receivable } & \$ 200,000 & \
\hline \text { Allowance for doubtful accounts } & 1,000 & \mathrm { Cr } . \
\hline \text { Sales } & & \
\hline
\end{array}$Additionally, the firm has given up trying to collect on $5,000 of its accounts receivable but has not yet recorded the write-off entry. The firm does not use the direct write off method to estimate bad debt expense.
(a) Provide the entry for the write-off of the receivable.
(b) If the firm uses the percentage of sales allowance method for recording bad debt expense, and has experienced an average 6% rate of non-collection based on sales, provide the entry to record bad debt expense for 2013.
(c) Assume that after the firm recorded the $5,000 of write-offs, it determined that 18% of its remaining accounts receivable will be uncollectible under the aging method. Provide the entry to record bad debt expense.

Question

The 12/31/13 unadjusted trial balance of a company disclosed the following balances: $\begin{array} { | l | l | l | } 
\hline \text { Accounts receivable } & \$ 200,000 & \
\hline \text { Allowance for doubtful accounts } & 1,000 & \mathrm { Cr } . \
\hline \text { Sales } & & \
\hline
\end{array}$Additionally, the firm has given up trying to collect on $5,000 of its accounts receivable but has not yet recorded the write-off entry. The firm does not use the direct write off method to estimate bad debt expense.
(a) Provide the entry for the write-off of the receivable.
(b) If the firm uses the percentage of sales allowance method for recording bad debt expense, and has experienced an average 6% rate of non-collection based on sales, provide the entry to record bad debt expense for 2013.
(c) Assume that after the firm recorded the $5,000 of write-offs, it determined that 18% of its remaining accounts receivable will be uncollectible under the aging method. Provide the entry to record bad debt expense.

Quizplus · Accepted Answer

The Answer of The 12/31/13 unadjusted trial balance of a company disclosed the following balances: $\begin{array} { | l | l | l | } 
\hline \text { Accounts receivable } & \$ 200,000 & \
\hline \text { Allowance for doubtful accounts } & 1,000 & \mathrm { Cr } . \
\hline \text { Sales } & & \
\hline
\end{array}$Additionally, the firm has given up trying to collect on $5,000 of its accounts receivable but has not yet recorded the write-off entry. The firm does not use the direct write off method to estimate bad debt expense.
(a) Provide the entry for the write-off of the receivable.
(b) If the firm uses the percentage of sales allowance method for recording bad debt expense, and has experienced an average 6% rate of non-collection based on sales, provide the entry to record bad debt expense for 2013.
(c) Assume that after the firm recorded the $5,000 of write-offs, it determined that 18% of its remaining accounts receivable will be uncollectible under the aging method. Provide the entry to record bad debt expense.

The 12/31/13 Unadjusted Trial Balance of a Company Disclosed the Following