At the end of 2013, Blackhorse Productions, Inc., used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $21,350. The account had an unadjusted credit balance of $10,800 at December 31, 2013.

Required:

1. Prepare journal entries for each transactions.

a. The appropriate bad debt adjustment was recorded for the year 2013.

b. On January 31, 2014, an account receivable for $1,100 from March 2013 was determined to be uncollectible and was written off.

Question

Andres Petersen

Business

6 December, 20:18

At the end of 2013, Blackhorse Productions, Inc., used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $21,350. The account had an unadjusted credit balance of $10,800 at December 31, 2013.

Required:

1. Prepare journal entries for each transactions.

a. The appropriate bad debt adjustment was recorded for the year 2013.

b. On January 31, 2014, an account receivable for $1,100 from March 2013 was determined to be uncollectible and was written off.

+2

Answers (1)

Know the Answer?

Page · Answer 1

Answer: The journal entries for each of the transactions are:

a) Debit Credit

Bad debt expense $10,550

Allowance for doubtful accounts $10,550

b) Debit Credit

Allowance for doubtful accounts $1,100

Accounts receivable $1,100

Explanation:

a) There was already an existing un-adjusted balance in the allowance for doubtful accounts of $10,800, meanwhile Blackhorse has estimated the amount to be $21,350 based on aging method. Simply subtract $10,800 from the $21,350 to arrive at $10,550. The above entries apply to recognize this additional provision.

b) Subsequent to year end, there was a write-off of $1,100, this means the accounts receivable balance would be reduced by this amount; same applies to the buffer (allowance account). The entries above apply.