Question

Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $9,600...

Dexter Company uses the direct write-off method.

March 11 Dexter determines that it cannot collect $9,600 of its accounts receivable from Leer Co.
29 Leer Co. unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt.


Prepare journal entries to record the above transactions.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:

Journal Entries (Amounts in $)

Date General Journal Debit Credit
March 11 Bad debt expense 9600
Accounts Receivable-Leer Co. 9600
(To record the write off of Leer Co.)
March 29 Accounts Receivable-Leer Co. 9600
Bad debt expense 9600
(To record the reinstate of account previously written off)
March 29 Cash 9600
Accounts Receivable-Leer Co. 9600
(To record cash received on account)

Notes:-

1) Under direct write off method, account is directly written off and no allowance account is used. Accounts receivable is credited and bad debt expense is debited for $9600.

2) When amount previously written off is received in cash then we need to reinstate the account previously written off by reversing the previous entry (i.e. by crediting bad debt expense and debiting accounts receivable).

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Apollo Company uses the direct write-off method of recording credit losses. Apollo Company wrote off the...
Apollo Company uses the direct write-off method of recording credit losses. Apollo Company wrote off the $3,200 account of Duck Co. in October 2016. In February 2017, Apollo Company received a final $1,200 payment from Duck’s trustee in bankruptcy. Apollo should make the following entry or entries to record the payment: Select one: A. Accounts Receivable--Duck Co. 1,200 Bad Debts Expense 1,200 Cash 1,200 Accounts Receivable--Duck Co. 1,200 B. Allowance for Doubtful Accounts 1,200 Bad Debts Expense 1,200 C. Accounts...
Apollo Company uses the direct write-off method of recording credit losses. Apollo Company wrote off the...
Apollo Company uses the direct write-off method of recording credit losses. Apollo Company wrote off the $3,200 account of Duck Co. in October 2016. In February 2017, Apollo Company received a final $1,200 payment from Duck’s trustee in bankruptcy. Apollo should make the following entry or entries to record the payment: Select one: A. Accounts Receivable--Duck Co. 1,200 Bad Debts Expense 1,200 Cash 1,200 Accounts Receivable--Duck Co. 1,200 B. Allowance for Doubtful Accounts 1,200 Bad Debts Expense 1,200 C. Accounts...
A company that uses the direct write-off method records the bad debt: a.   as a percentage...
A company that uses the direct write-off method records the bad debt: a.   as a percentage of net credit sales during the year b.   as an amount that is based on the aging of accounts receivable c.   as an amount that is based on the aging of accounts receivable after considering the current balance in the allowance for doubtful accounts account. d.   as the receivable is deemed worthless
Owens Company uses the direct write-off method of accounting for uncollectible accounts receivable. On December 6,...
Owens Company uses the direct write-off method of accounting for uncollectible accounts receivable. On December 6, Year 1, Owens sold $6,300 of merchandise to the Valley Company. On August 8, Year 2, after numerous attempts to collect the account, Owens determined that the account of the Valley Company was uncollectible. a. Prepare the journal entry required to record the transactions on August 8. b. Assuming that the $6,300 is material, explain how the direct write-off method violates the expense recognition...
At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit...
At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $643,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $322 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions.
At year-end (December 31), Chan Company estimates its bad debts as 0.40% of its annual credit...
At year-end (December 31), Chan Company estimates its bad debts as 0.40% of its annual credit sales of $980,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $490 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare the journal entries for these transactions.
At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit...
At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $758,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $379 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare the journal entries of Chan to record these transactions and events of December 31, February 1,...
Part A. Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting...
Part A. Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Oct. 2: Received $2,440 from Ian Kearns and wrote off the remainder owed of $3,810 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20: Reinstated the account of Ian Kearns and received $3,810 cash in full payment. Dec. 20-Reinstate Dec. 20-Collection Options: Accounts Receivable-Ian Kearns Allowance for Doubtful Accounts Bad Debt Expense...
Millennium Associates records bad debt using the allowance, balance sheet method. They recorded $299,420 in accounts...
Millennium Associates records bad debt using the allowance, balance sheet method. They recorded $299,420 in accounts receivable for the year, and $773,270 in credit sales. The uncollectible percentage is 3.2%. On November 22, Millennium Associates identifies one uncollectible account from Angel’s Hardware in the amount of $3,650. On December 18, Angel’s Hardware unexpectedly pays its account in full. Record journal entries for the following. A.Year-end adjusting entry for 2017 bad debt B.November 22, 2018 identification entry C.Entry for payment on...
Uncollectible Accounts, Using Direct Write-Off Method Illustrate the effects on the accounts and financial statements of...
Uncollectible Accounts, Using Direct Write-Off Method Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of Valley Care & Supplies Co., a local hospital supply company that uses the direct write-off method of accounting for uncollectible receivables: If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. March 18. Received $15,250 on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT