Question

Sharon Silver is an attorney in Los Angeles. Silver uses the directâ write-off method to account for uncollectible receivables. At April 30 comma 2018â, Silverâ's accounts receivable totaled $ 22 comma 000. During Mayâ, she earned revenue of $ 25 comma 000 on account and collected $ 16 comma 000 on account. She also wrote off uncollectible receivables of $ 3 comma 250 on May 31â, 2018. Read the requirements.

1.) Use the direct write-off method to journalize Silver's write-off of the uncollectible receivables.

2.) What is Silver's balance of Accounts Receivable at May 31, 2018?

Answer 1

1. Bad debt expense A/c Dr $3,250

To Account receivable A/c $3,250

(Being the uncollectible receivables are recorded)

2. $27,750

Step-by-step explanation:

1. The adjusting entry is shown below:

Bad debt expense A/c Dr $3,250

To Account receivable A/c $3,250

(Being the uncollectible receivables are recorded)

2. The computation of ending balance of account receivable is shown below:

Ending account receivable balance = Beginning account receivable + credit sales - collections - written off amount

= $22,000 + $25,000 - $16,000 - $3,250

= $27,750