Question

On January 1, 2019, Hungryman, Inc., has the following balances for accounts receivable and allowance for doubtful accounts: Accounts Receivable $1,272,400 Allowance for Doubtful Accounts (a credit balance) 46,000 During 2019, Hungryman had $18,900,000 of credit sales, collected $17,945,000 of accounts receivable, and wrote off $60,000 of accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $52,000 will be uncollectible. Required:

1. Calculate Hungryman's preadjustment balance in accounts receivable on December 31, 2019.

2. Calculate Hungryman's preadjustment balance in allowance for doubtful accounts on December 31, 2019.

3.Prepare the necessary adjusting entry for 2019

Answer 1

• Working for [1] and [2]

	Accounts receivables balance Debit (Credit)	Allowance for Doubtful Accounts - Credit (Debit)
Beginning balance	$1,272,400	$46,000
Credit sales	$18,900,000
Collection	($17,945,000)
Written off	($60,000)	($60,000)
Pre adjustment balance	$2,167,400	($14,000)

• [1]
  Accounts receivables = $ 2,167,400 Debit
• [2]
  Allowance for doubtful accounts = $ 14000 Debit
• [3]

Accounts title	Debit	Credit
Bad Debt Expense	$66,000
Allowance for Doubtful Accounts($52000 credit required + $ 14000 debit existing]		$66,000