January 15 Wrote of $440 account of Miller Company as uncollectible Re-establish the account of Louisa Teller and record the collection of $1,050 as payment in full for her account which had been written off earlier Received 40% of the $700 balance owed by William John and wrote off the remainder as April 2nd July 31 uncollectible Wrote off as uncollectible the accounts of Sherwin Company, $1,700 and V. Vasell $2,200 Received 25% of the $1,140 owed by Grant Company and wrote off the remainder as uncollectible Received $741 from M. Fuller in full payment of his account which had been written off August 15 September 26 October 16 earlier as uncollectible Estimated uncollectible accounts expense for the year to be 1.5% of net credit sales of $521,000 December 31
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.
Johnson company’s financial year ended on December 31, 2010. All the
transactions related to the company’s uncollectible accounts are can be found below:
The
Required:
1. Prepare
2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account.
![Wrote of $440 account of Miller Company as
uncollectible
Re-establish the account of Louisa Teller and
record the collection of $1,050 as payment in
full for her account which had been written
January 15
April 2nd
off earlier
Received 40% of the $700 balance owed by
July 31
William John and wrote off the remainder as
uncollectible
Wrote off as uncollectible the accounts of
Sherwin Company, $1,700 and V. Vasell
$2,200
Received 25% of the $1,140 owed by Grant
Company and wrote off the remainder as
uncollectible
Received $741 from M. Fuller in full payment
of his account which had been written off
earlier as uncollectible
Estimated uncollectible accounts expense for
the year to be 1.5% of net credit sales of
$521,000
August 15
September 26
October 16
December 31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff864eb41-3541-4db0-b3ba-0c996c48c5a0%2F7bdd2085-c7b8-4985-89aa-f39d88403eed%2Ftlz1okn_processed.png&w=3840&q=75)
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