Question

Exercise 8-07 At December 31, 2019, Pharoah Company Company had a credit balance of $18,100 in Allowance for Doubtful Accounts. During 2020, Pharoah Company wrote off accounts totaling $12,900. One of those accounts ($2,100) was later collected. At December 31, 2020, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $23,700. Prepare journal entries to record the 2020 transactions of Pharoah Company Company

Answer 1

Entries are given below

Step-by-step explanation:

DATA:

Opening Balance in the allowance for doubtful debt = $18,100

During 2020 Pharoah company wrote off accounts totaling 12,900

Entry DEBIT CREDIT

Allowance for Doubtful Accounts $11,800

Accounts Receivable $11,800

At December 31, 2020, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $23,700

Entry DEBIT CREDIT

Bad debt expense $17,400

Allowance for doubtful debt $17,400

Working

Balance before adjustment = $18,100 - $11,800

Balance before adjustment = $6,300

After Aging schedule indication

Adjustment = $23,700 - 6,300

Adjustment = $17,400