Question

At the beginning of the current period, Sheridan Company had balances in Accounts Receivable of $220,000 and in Allowance for Doubtful Accounts of $13,000 (credit). During the period, it had net credit sales of $703,000 and collections of $553,000. It wrote off as uncollectible accounts receivable of $6,500. However, a $4,000 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $21,000 at the end of the period.

(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 debts expense for the period.

Answer 1

( A) Journal Entry

Date	Account Name	Debit	Credit
A)	Account Receivable	$703,000
	To Sales Revenue		$703,000
	( to record sales.)
	Cash	$553,000
	To Account Receivable		$553,000

( B) Journal Entry:

B)	Allowance For Doubtful Accounts	$6500
	To Account Receivable		$6500

( C) Journal Entry:

C)	Account Receivable	$4000
	To Allowance for Doubtful accounts		$40000
	( to reinstate account previously written off)
	Cash	$4000
	To Account Receivable		$4000

( D) Journal Entry:

D)	Bad Debt Expense	$14,500
	To Allowance for doubtful accounts		$14,500

($ 21,000- $9000- 6500 +4000)