On January 1, Wei company begins the accounting period with a $40,000 credit balance in Allowance for Doubtful Accounts. On February 1, the company determined that $8,800 in customer accounts was uncollectible; specifically, $1,900 for Oakley Co. and $6,900 for Brookes Co. Prepare the journal entry to write off those two accounts. On June 5, the company unexpectedly received a $1,900 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.

Question

Darius Sullivan

Business

12 August, 06:59

On January 1, Wei company begins the accounting period with a $40,000 credit balance in Allowance for Doubtful Accounts. On February 1, the company determined that $8,800 in customer accounts was uncollectible; specifically, $1,900 for Oakley Co. and $6,900 for Brookes Co. Prepare the journal entry to write off those two accounts. On June 5, the company unexpectedly received a $1,900 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.

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Milton Haas · Answer 1

The Journal entries are as follows:

(a) On February 1,

Allowance for doubtful accounts Dr. $8,800

To Account receivable-Oakley Co $1,900

To Account receivable-Brookes Co $6,900

(To record write off)

(b) On June 5,

(i)

Account receivable-Oakley Co. Dr. $1,900

To Allowance for doubtful accounts $1,900

(To record amount reinstated)

(ii)

Cash A/c Dr. $1,900

To Account receivable-Oakley CO $1,900

(To record cash received)