Question

On January 1, Wei company begins the accounting period with a $45,000 credit balance in allowance...

On January 1, Wei company begins the accounting period with a $45,000 credit balance in allowance for doubtful accounts.

a. On February 1, the company determined that $9,800 in customer accounts was uncollectible; specifically, $2,400 for Oakley Co. and $7,400 for Brookes Co. Prepare the journal entry to write off those two accounts.

b. On June 5, the company unexpectedly received a $2,400 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries necessary to reinstate the account and to record the cash received.

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Answer #1

a) Journal entry :

Date account and explanation debit credit
Feb 1 Allowance for doubtful accounts 9800
Account receivable-Oakley Co 2400
Account receivable-Brookes Co 7400
(To record write off)

b) Journal entry :

Date account and explanation debit credit
June 5 Account receivable-Oakley CO 2400
Allowance for doubtful accounts 2400
(To record amount reinstated)
June 5 Cash 2400
  Account receivable-Oakley CO 2400
(To record cash received)
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