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14 July, 22:41

On January 1, Wei company begins the accounting period with a $36,000 credit balance in allowance for doubtful accounts. a. On February 1, the company determined that $8,000 in customer accounts was uncollectible; specifically, $1,500 for Oakley Co. and $6,500 for Brookes Co. Prepare the journal entry to write off those two accounts. b. On June 5, the company unexpectedly received a $1,500 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries necessary to reinstate the account and to record the cash received.

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  1. 14 July, 23:04
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    Answer: The journal entries are as follows:

    Explanation:

    Given that,

    On January 1,

    Credit balance in allowance for doubtful accounts = $36,000

    (a) On February 1,

    Allowance for doubtful accounts Dr. $8000

    To Accounts receivable-Oakley co. $1500

    To Accounts receivable-Brookes Co. $6500

    (b) On June 5,

    (i) Accounts receivable - Oakley A/c Dr. $1500

    To Allowance for doubtful accounts $1500

    (ii) Cash A/c Dr. $1500

    To Accounts receivable - Oakley $1500
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