On December 31, 2017, Ling Co. estimated that 2% of its net sales of $443,800 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. On May 11, 2018, Ling Co. determined that the Jeff Shoemaker account was uncollectible and written off $2,219. On June 12, 2018, Shoemaker paid the amount previously written off. Prepare the journal entries on December 31, 2017, May 11, 2018, and June 12, 2018.

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Business

Dalton Hayden

9 October, 07:35

On December 31, 2017, Ling Co. estimated that 2% of its net sales of $443,800 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. On May 11, 2018, Ling Co. determined that the Jeff Shoemaker account was uncollectible and written off $2,219. On June 12, 2018, Shoemaker paid the amount previously written off. Prepare the journal entries on December 31, 2017, May 11, 2018, and June 12, 2018.

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Bridger Benitez · Answer 1

The journal entries are shown below:

1. Bad debt expense A/c Dr $8,876

To Allowance for doubtful debts $8,876

(Being bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= Credit sales * estimated percentage given

= $443,800 * 2%

= $8,876

2. Allowance for doubtful accounts A/c Dr $2,219

To Account receivable A/c $2,219

(Being the written off amount is recorded)

3. Allowance for doubtful accounts A/c Dr $2,219

To Account receivable A/c $2,219

(Being the written off amount is recorded)

4. Cash A/c Dr $2,219

To Account receivable A/c $2,219

(Being the written off amount is collected)