Question

On January 1, 2013, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,501. During the first 11 months of the year, bad debts expense of $21,413 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2013, was $9,896. Required: (a) What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.) (b) As the result of a comprehensive analysis, it is determined that the December 31, 2013, balance of the Allowance for Bad Debts account should be $9,276. Show the adjustment required in the journal entry format.

Answer 1

Answer:Total of accounts written off=$25, 018, part b is in the explanation column

Step-by-step explanation:

Total of accounts (Bad debt) written off=Opening Balance in bad debt allowance account+

bad debt expense recognized during the period −

Closing balance in bad debt allowance account

=$13,501+$21,413−$9,896

=$25, 018

T---account

Allowance for bad debts

$13,501 Balance from Jan 1st

$21,413 Bad debts expense

Bad debts written off $25, 018

$9,896 Balance on November 30

b)Adjusted journal entry for change in amount of allowance for bad debt account

December 31st 2013 Account Debit Credit

Allowance for bad debts $620

Bad debts expense $620

calculation

The balance in allowance for bad debt account as on November 30 is $9 896 , when it was supposed to be $9,276. Therefore the bad debt expense is overstated by

$9,896- $9, 276 = $620

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