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E 7-9 Uncollectible accounts; allowance method;...




E 7-9 Uncollectible accounts; allowance method; balance sheet approach LO5 LO6 Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2011, accounts receivable totaled $625,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $32,000 at the beginning of 2011 and $21,000 in receivables were written off during the year as uncollectible. Also, $1,200 in cash was received in December from a customer whose account previously had been written off. The company estimates bad debts by applying a percentage of 10% to accounts receivable at the end of the year. Required: 1. Prepare journal entries to record the write-off of receivables, the collection of $1,200 for previously written off receivables, and the year-end adjusting entry for bad debt expense. 2. How would accounts receivable be shown in the 2011 year-end balance sheet?


Paper#6617 | Written in 18-Jul-2015

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