On December 31, 2020, Novak Corp. estimated that 4% of its net accounts receivable of $414,400 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. The allowance account had a zero balance before adjustment on December 31, 2020. On May 11, 2021, Novak Corp. determined that the Jeff Shoemaker account was uncollectible and wrote off $2,072. On June 12, 2021, Shoemaker paid the amount previously written off. Prepare the journal entries on December 31, 2020, May 11, 2021, and June 12, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021 enter an account title to reverse write-off enter a debit amount enter a credit amount enter an account title to reverse write-off enter a debit amount enter a credit amount (To reverse write-off) choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021 enter an account title to record collection of write-off enter a debit amount enter a credit amount enter an account title to record collection of write-off enter a debit amount enter a credit amount (To record collection of write-off)
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.
On December 31, 2020, Novak Corp. estimated that 4% of its net
Prepare the
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Date
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Account Titles and Explanation
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Debit
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Credit
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|---|---|---|---|
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choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021
|
enter an account title
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enter a debit amount
|
enter a credit amount
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
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choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021 |
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
|
choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021 |
enter an account title to reverse write-off
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to reverse write-off
|
enter a debit amount
|
enter a credit amount
|
|
|
(To reverse write-off)
|
|||
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choose a transaction date Dec. 31, 2020/ May 11, 2021/ June 12, 2020/ June 12, 2021 |
enter an account title to record collection of write-off
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record collection of write-off
|
enter a debit amount
|
enter a credit amount
|
|
|
(To record collection of write-off)
|
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