Journalizes transactions using the allowance method assuming the account's credit balance started at $ 28,000 on February 1 and the company uses the accounts receivable method analysis. Selected Transactions from Music Express Records as of December 31: April 10th. Account canceled (wrote off account) of Mario Guzmán for $ 6,400. Journalizes transactions using the allowance method assuming the account's credit balance started at $ 28,000 on February 1 and the company uses the accounts receivable method analysis. June 12. A partial payment of $ 1,500 was received from Margarita Rodríguez's account from a $ 10,000 credit account. The remainder of the balance is written off as uncollectible.
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.
Music Express is a company that sells both car and home stereos.
Jornalize transactions using the direct write off method.
Journalizes transactions using the allowance method assuming the account's credit balance started at $ 28,000 on February 1 and the company uses the
Selected Transactions from Music Express Records as of December 31:
April 10th. Account canceled (wrote off account) of Mario Guzmán for $ 6,400. Journalizes transactions using the allowance method assuming the account's credit balance started at $ 28,000 on February 1 and the company uses the accounts receivable method analysis.
June 12. A partial payment of $ 1,500 was received from Margarita Rodríguez's account from a $ 10,000 credit account. The remainder of the balance is written off as uncollectible.
20th of August. The amount of $ 6,400 was received from Mario Guzmán from the account that was canceled on April 10. Reinstall the account and record the cash receipt.
December 31st. Write off the following accounts as uncollectible (make a wage entry):
| Ricardo Vega | $3,200 |
| Mariela Gutiérrez | 2,440 |
| Manuel Rosario | 6,200 |
| Jorge Camacho | 1,800 |
| Linda Ocasio | 5,330 |
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