Accounts receivable transactions are provided below for J Cullumber Co. Dec. 31, 2023 Mar. 5, 2024 June 6, 2024 (a) The company estimated that 5% of its accounts receivable would become uncollectible. The balances in the Accounts Receivable account and Allowance for Doubtful Accounts were $693,000 and $2,600 (debit), respectively. Date The company determined that R. Mirza's $3,900 account and D. Wight's $7,500 account were uncollectible. The company's accounts receivable were $730,400 before the accounts were written off. Wight paid the amount that had been written off on March 5. The company's accounts receivable were $681,600 prior to recording the cash receipt for Wight. Prepare the journal entries on December 31, 2023, March 5, 2024, and June 6, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Account Titles (To record write off of accounts receivable of R. Mirza.) (To record write off of accounts receivable of D. Wight.) (To reverse write off.) (Collection of account that was previously written off.) Debit Credit
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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