December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance me On thod of accounting for uncollectible accounts. In February of Year 2, f Loudoun's customers failed to pay his $1,050 account and the account was written off On April 4. Year 2 this customer paid Loudoun the $1,050 Which of the following answers correctly the customer's account? states the effect of Loudoun Company's February Year 2 entry to write off Assets = Liab.+Equity Rev. - Expenses = Net Inc. Cash Flow A. NA = NA + NA NA - NA = NA NA NA B. (1,050) = NA + (1,050) (1,050) - NA = (1,050) NA c. (1,050) = (1,050) + NA NA-NA=NA NA D. NA = (1,050) + (1,050) NA - (1,050) - (1,050) NA.

1. Option C

2. Option B

3. Option D

4. Option A

Question

Business

Frankie Maxwell

25 October, 10:59

December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance me On thod of accounting for uncollectible accounts. In February of Year 2, f Loudoun's customers failed to pay his $1,050 account and the account was written off On April 4. Year 2 this customer paid Loudoun the $1,050 Which of the following answers correctly the customer's account? states the effect of Loudoun Company's February Year 2 entry to write off Assets = Liab.+Equity Rev. - Expenses = Net Inc. Cash Flow A. NA = NA + NA NA - NA = NA NA NA B. (1,050) = NA + (1,050) (1,050) - NA = (1,050) NA c. (1,050) = (1,050) + NA NA-NA=NA NA D. NA = (1,050) + (1,050) NA - (1,050) - (1,050) NA.

1. Option C

2. Option B

3. Option D

4. Option A

+2

Answers (1)

Know the Answer?

Moses · Answer 1

A. NA = NA + NA NA - NA = NA NA NA

Explanation:

As Year 2 the customer paid Loudoun the $1,050, which was written off On April 4, Year 1.

Therefore, the following journal entries to record the transaction.

Accounts receivable debit $1,050

Allowance for doubtful accounts credit $1,050

To record reinstatement of accounts receivable.

Cash debit $1,050

Accounts receivable credit $1,050

As one asset account is increase and another asset account is decreased.