E9-5 Sales, write-offs and bad debt recovery [10 min] Hi-Performance Mobile Phones sold $23000 of merchandise to Avery Trucking Company on account. Avery fell on hard times and paid only $8000 of the account receivable. After repeated attempts to collect, Hi-Performance finally wrote off its accounts receivable from Avery. Six months later Hi-Performance received Avery's cheque for $15000 with a note apologising for the late payment. Requirement Journalise for Hi-Performance: 1 Sale on credit, $23000 (ignore cost of sales). 2 Collection of $8000 on account. 3 Write-off of the remaining portion of the Avery account receivable. Hi-Performance uses the allowance method for bad debts. 4 Reinstatement of Avery's account receivable. 5 Collection in full from Avery, $15000.

E9-5 Sales, write-offs and bad debt recovery [10 min] Hi-Performance Mobile Phones sold $23000 of merchandise to Avery Trucking Company on account. Avery fell on hard times and paid only $8000 of the account receivable. After repeated attempts to collect, Hi-Performance finally wrote off its accounts receivable from Avery. Six months later Hi-Performance received Avery's cheque for $15000 with a note apologising for the late payment. Requirement Journalise for Hi-Performance: 1 Sale on credit, $23000 (ignore cost of sales). 2 Collection of $8000 on account. 3 Write-off of the remaining portion of the Avery account receivable. Hi-Performance uses the allowance method for bad debts. 4 Reinstatement of Avery's account receivable. 5 Collection in full from Avery, $15000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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P9.4
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E6-9 (Algo) Recording Bad Debt Expense Estimates and Write-Offs Using the Percentage of Credit Sales Method LO6-2 During the current year, Witz Electric, Inc., recorded credit sales of $850,000. Based on prior experience, it estimates a 3 percent bad debt rate on credit sales. Required: Prepare journal entries for each transaction: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. On September 29 of the current year, an account receivable for $3,000 from March of the current year was determined to be uncollectible and was written off. b. The appropriate bad debt expense adjustment was recorded for the current year. View transaction list Journal entry worksheet
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