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22 June, 08:48

Stephanie Roe utilizes the direct write-off method of accounting for uncollectible receivables. On September 15, she is notified by the attorneys for Jacob Marley that Jacob Marley is bankrupt and no cash is expected in the liquidation of Jacob Marley. Write off the $4,970 of accounts receivable due from Jacob Marley.

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  1. 22 June, 09:06
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    Dr Bad Debts $4,970

    Cr Accounts Receivables $4,970

    Explanation:

    The bad debts are confirmed and once it is confirmed it is written off by decreasing the accounts receivables by the amount as the amount is not now receivable and increase the bad debt expense because this is cost to the company. The bad debts confirmed are accounted for as under:

    Dr Bad Debts $4,970

    Cr Accounts Receivables $4,970
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