View the step-by-step solution to:

Question

Uncollectible Accounts C&N Ltd, is a manufacturer that makes all sales on a 30-days credit terms. Annual sales

are approximately $25 million. At the end of 2016 accounts receivable were presented in the company's Balance Sheet as below: Accounts Receivable $2,350,000 Less: Allowance for Doubtful accounts $70,000 During 2017, $740,000 in accounts receivable were written off as uncollectible. Of these amounts written off, receivables totaling $24,000 were unexpectedly collected. At the end of 2017, an aging of accounts receivable indicated a need for an $80,000 allowance to cover possible failure to collect the accounts currently outstanding. C&N Ltd makes adjusting entries in its accounting records only at year end. Required: a. Explain the difference between making an allowance for bad debts, and writing off a bad debt. Explain how each case is treated and shown in accounting. b. Prepare one journal entry to summarize all accounts written off against the allowance for doubtful accounts in 2017. c. Prepare entries to record the $24,000 in accounts receivable which were unexpectedly collected. d. Prepare an adjusting entry on 31 December 2017 to increase the allowance for doubtful accounts to $80,000. (5 marks)

Top Answer

a). An allowance for bad debt is the amount Accounts Receivable estimated to be uncollectible at some point in the future... View the full answer

Journal Entries.jpg

Accounting 1- Answers (Autosaved) (Autosaved) (Autosaved) - Microsoft Excel
File Home Insert Page Layout Formulas Data Review
Cut
Copy *
Calibri
- 11 " A A
8= x Wrap Text
General
AutoSum . A...

Sign up to view the full answer

Other Answers

All working are given... View the full answer

Capture.JPG

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question