Question

On December 31, 2016, when its Allowance for Doubtful Accounts had a debit balance of $1,432, Sunland Company estimates that 9% of its accounts receivable balance of $105,900 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2017, Sunland Company determined that B. Jared’s account was uncollectible and wrote off $1,091. On June 12, 2017, Jared paid the amount previously written off.Required:Prepare the journal entries on December 31, 2016, May 11, 2017, and June 12, 2017.

Answer 1

Answer: Please see explanation column for answers

Step-by-step explanation:

1) To record bad debts expense

Date Account Debit Credit

Dec 31, 2016 Bad Debt Expense $10,963

Allowance for doubtful account $10,963

Calculation ;

Bad debts expense

9% x $105,900 = $9,531

Adjustment= $9,531 + debit balance of $1,432=$10,963

2) To write off uncollectible accounts receivables

Date Account Debit Credit

May 11, 2017 Allowance for doubtful account $1,091.

Accounts receivable--- B. Jared $1,091.

3) To reinstate accounts accounts previously written off

Date Account Debit Credit

June 12, 2017 Accounts receivable--- B. Jared $1,091.

Allowance for doubtful account $1,091.

3b)to collect cash from receivables

Date Account Debit Credit

June 12, 2017 Cash $1,091.

Accounts receivable--- B. Jared $1,091.