The Fast &Furious Car Rentals starts business on January 1, 2014. At December 31, 2014, the total accounts receivable of the company are $350,000; out of which, management estimates that receivables amounting to $4,500 will turn out to be uncollectible. At February 12, 2015, Astra Ltd who is a receivable of $1,200, becomes bankrupt and nothing can be recovered from them. At December 31, 2015, the accounts receivable show a balance of $475,000. On this date, the company revises the estimates of its credit losses and determines that receivables amounting to $4,800 will become uncollectible receivables. Required: a. Prepare an adjusting entry to recognize uncollectible accounts expense at December 31, 2014. b. Prepare an entry to write off accounts receivable at February 12, 2015. c. Prepare an adjusting entry to recognize uncollectible accounts expense at December 31, 2015.
Uncollectible Receivables
The Fast &Furious Car Rentals starts business on January 1, 2014.
At December 31, 2014, the total
At February
12, 2015, Astra Ltd who is a receivable of $1,200, becomes bankrupt and nothing can be recovered from them.
At December 31, 2015, the accounts receivable show a balance of
$475,000. On this date, the company revises the estimates of its credit losses and determines that receivables amounting to $4,800 will become uncollectible receivables.
Required:
a. Prepare an
b. Prepare an entry to write off accounts receivable at February 12, 2015.
c. Prepare an adjusting entry to recognize uncollectible accounts expense at December 31, 2015.
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