At the beginning of the current period, Marigold Corp. had balances in Accounts Receivable of $204,500 and in Allowance for Doubtful Accounts of $8,620 (credit). During the period, it had net credit sales of $836,300 and collections of $706,700. It wrote off as uncollectible accounts receivable of $7,063. However, a $3,070 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $23,050 at the end of the period. (Omit cost of goods sold entries.) Collapse question part (a - d)

(a) Prepare the entries to record sales and collections during the period.

(b) Prepare the entry to record the write-off of uncollectible accounts during the period.

(c) Prepare the entries to record the recovery of the uncollectible account during the period.

(d) Prepare the entry to record bad debt expense for the period.

Question

Business

Ryleigh Holder

9 August, 09:38

At the beginning of the current period, Marigold Corp. had balances in Accounts Receivable of $204,500 and in Allowance for Doubtful Accounts of $8,620 (credit). During the period, it had net credit sales of $836,300 and collections of $706,700. It wrote off as uncollectible accounts receivable of $7,063. However, a $3,070 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $23,050 at the end of the period. (Omit cost of goods sold entries.) Collapse question part (a - d)

(a) Prepare the entries to record sales and collections during the period.

(b) Prepare the entry to record the write-off of uncollectible accounts during the period.

(c) Prepare the entries to record the recovery of the uncollectible account during the period.

(d) Prepare the entry to record bad debt expense for the period.

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Answers (1)

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Estrella Lindsey · Answer 1

The journal entries are shown below:

a. Accounts receivable A/c Dr $836,300

To Service revenue A/c $836,300

(Being service provided is recorded)

Cash A/c Dr $706,700

To Accounts receivable A/c $706,700

(Being payment is received)

b. Allowance for doubtful debts A/c Dr $7,063

To Accounts receivable A/c $7,063

(Being uncollectible amount is recorded)

c. Accounts receivable A/c Dr $3,070

To Allowance for doubtful debts A/c $3,070

(Being previous written off amount recorded)

Cash A/c Dr $3,070

To Accounts receivable A/c $3,070

(Being payment is received)

d. Bad debt expense A/c Dr $18,423

To Allowance for doubtful debts $18,423

(Being bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= Credit balance of accounts receivable + previous written off amount - uncollectible amount - estimated uncollectible amount

= $8,620 + $3,070 - $7,063 - $23,050

= $18,423