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EX 9-5 Entries to write off accounts receivable OBJ. 3, 4 Creative Solutions Company, a computer consulting firm, has decided to write off the $11,750 balance of an account owed by a customer, Wil Treadwell. Journalize the entry to record the write-off, assuming that (a) the direct write-off method is used and (b) the allowance method is used.

EX 9-5 Entries to write off accounts receivable OBJ. 3, 4 Creative Solutions Company, a computer consulting firm, has decided to write off the $11,750 balance of an account owed by a customer, Wil Treadwell. Journalize the entry to record the write-off, assuming that (a) the direct write-off method is used and (b) the allowance method is used.

FINANCIAL ACCOUNTING
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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**EX 9-5: Entries to Write Off Accounts Receivable** Creative Solutions Company, a computer consulting firm, has decided to write off the $11,750 balance of an account owed by a customer, Wil Treadwell. Journalize the entry to record the write-off, assuming that (a) the direct write-off method is used and (b) the allowance method is used. --- **Instructions for Educational Context:** This exercise involves determining how to record the write-off of an uncollectible account using two different accounting methods: the direct write-off method and the allowance method. 1. **Direct Write-Off Method**: - This method involves directly debiting Bad Debt Expense and crediting Accounts Receivable for the specific amount written off. 2. **Allowance Method**: - This method requires estimating uncollectible accounts at the end of each period, debiting Allowance for Doubtful Accounts, and crediting Accounts Receivable when a specific account is determined to be uncollectible. Understanding these methods is essential for accurate financial reporting and compliance with accounting standards.
Transcribed Image Text:**EX 9-5: Entries to Write Off Accounts Receivable** Creative Solutions Company, a computer consulting firm, has decided to write off the $11,750 balance of an account owed by a customer, Wil Treadwell. Journalize the entry to record the write-off, assuming that (a) the direct write-off method is used and (b) the allowance method is used. --- **Instructions for Educational Context:** This exercise involves determining how to record the write-off of an uncollectible account using two different accounting methods: the direct write-off method and the allowance method. 1. **Direct Write-Off Method**: - This method involves directly debiting Bad Debt Expense and crediting Accounts Receivable for the specific amount written off. 2. **Allowance Method**: - This method requires estimating uncollectible accounts at the end of each period, debiting Allowance for Doubtful Accounts, and crediting Accounts Receivable when a specific account is determined to be uncollectible. Understanding these methods is essential for accurate financial reporting and compliance with accounting standards.
**PE 8-2A: Items on Company's Bank Statement** The following items may appear on a bank statement: 1. Bank correction of an error from recording a $6,200 deposit as $2,600 2. EFT payment 3. Note collected for company 4. Service charge Using the following format, indicate whether each item would appear as a debit or credit memo on the bank statement and whether the item would increase or decrease the balance of the company’s account: | Item No. | Appears on the Bank Statement as a Debit or Credit Memo | Increases or Decreases the Balance of the Company’s Bank Account | |----------|-------------------------------------------------------|------------------------------------------------------------------| | | | | --- **PE 8-3A: Bank Reconciliation** The following data were gathered to use in reconciling the bank account of Eves Company: - Balance per bank: $9,350 - Balance per company records: $8,510 - Bank service charges: $35 - Deposit in transit: $2,350 - NSF check: $1,875 - Outstanding checks: $5,100 a. What is the adjusted balance on the bank reconciliation? b. Journalize any necessary entries for Eves Company based on the bank reconciliation.
Transcribed Image Text:**PE 8-2A: Items on Company's Bank Statement** The following items may appear on a bank statement: 1. Bank correction of an error from recording a $6,200 deposit as $2,600 2. EFT payment 3. Note collected for company 4. Service charge Using the following format, indicate whether each item would appear as a debit or credit memo on the bank statement and whether the item would increase or decrease the balance of the company’s account: | Item No. | Appears on the Bank Statement as a Debit or Credit Memo | Increases or Decreases the Balance of the Company’s Bank Account | |----------|-------------------------------------------------------|------------------------------------------------------------------| | | | | --- **PE 8-3A: Bank Reconciliation** The following data were gathered to use in reconciling the bank account of Eves Company: - Balance per bank: $9,350 - Balance per company records: $8,510 - Bank service charges: $35 - Deposit in transit: $2,350 - NSF check: $1,875 - Outstanding checks: $5,100 a. What is the adjusted balance on the bank reconciliation? b. Journalize any necessary entries for Eves Company based on the bank reconciliation.
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