Ask Question
17 November, 06:09

On December 31, 2020, Cheyenne Corp. estimated that 3% of its net accounts receivable of $435,200 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. The allowance account had a zero balance before adjustment on December 31, 2020. On May 11, 2021, Cheyenne Corp. determined that the Jeff Shoemaker account was uncollectible and wrote off $2,176. On June 12, 2021, Shoemaker paid the amount previously written off. Prepare the journal entries on December 31, 2020, May 11, 2021, and June 12, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

+3
Answers (1)
  1. 17 November, 08:43
    0
    The journal entries are shown below:

    On December 31, 2020

    Bad debt expense A/c Dr

    To Allowance for doubtful debts

    (Being allowance for doubtful debts is recorded)

    The computation is shown below:

    = Accounts receivable * estimated percentage given

    = $435,200 * 3%

    = $13,056

    On May 11, 2021

    Allowance for doubtful debts A/c Dr $2,176

    To Accounts receivable $2,176

    (Being debtors written off is recorded)

    On June 12, 2021

    Accounts receivable $2,176

    To Allowance for doubtful debts A/c Dr $2,176

    (Being reversal entry is passed)

    Cash A/c Dr $2,176

    To Accounts receivable $2,176

    (Being cash received for written off amount)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On December 31, 2020, Cheyenne Corp. estimated that 3% of its net accounts receivable of $435,200 will become uncollectible. The company ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers