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29 January, 18:02

At the beginning of the current period, Swifty Corporation had balances in Accounts Receivable of $195,100 and in Allowance for Doubtful Accounts of $9,350 (credit). During the period, it had net credit sales of $745,500 and collections of $835,120. It wrote off as uncollectible accounts receivable of $7,831. However, a $3,184 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $24,100 at the end of the period. (Omit cost of goods sold entries.) (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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  1. 29 January, 20:05
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    accounts receivables 745,500 debit

    sales revenues 745,500 credit

    allowance for uncollectible account 7,831 debit

    accounts receivables 7,831 credit

    accounts receivables 3,184 debit

    allowance for uncollectible account 3,184 credit

    cash 3,184 debit

    accounts receivables 3,184 credit

    bad debt expense 19,397 debit

    allowance for uncollectible account 19,397 credit

    Explanation:

    during the year trasanctions

    When the accounts are wrote-off the company decreases teh allowance it doesn't recognize an expense in that moment.

    If an account is recovery then is the reverse entry as a write-off for the amount we recover. Then, we post the entry like it was a normal collection.

    Year-end adjustment:

    allowance adjusting entry amount:

    estimated allowance - current balance = bad debt expense

    estimated 24,100 - (beginning 9,350 - 7,831 wrote-off + 3,184 recovery)

    24,100 - 4,703 = 19,397
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