Accounts Receivable

B.
Cash                                        1,898,000
       Accounts Receivable                1,898,000

Collections are recorded to receivables, so use the accounts receivable account to determine the amount:

Beginning accounts receivable       470,000
+ credit sales only                          1,960,000  
– collections                                                  ??
– write-offs                                           (32,000)
= Ending accounts receivable          500,000

Collections must be 1,898,000 for ending accounts receivable to be 500,000

C.
Allowance for uncollectible accts    32,000
       Accounts Receivable                            32,000

D.
Bad Debt Expense                             58,800
       Allowance for uncollectible accts               58,800

Credit Sales  x  historical % of sales  =  Bad debt expense
1,960,000  x  .03  =  58,800

The amount calculated is the amount of bad debt expense recorded 

(% of sales is the easy method because the current balance in the allowance account does not matter)

E.
Bad Debt Expense                        35,000
       Allowance for uncollectible accounts        35,000

Ending accounts Receivable x historical % of A/R =  Ending balance in allowance
500,000 x .05  = 25,000

The amount that must be recorded to get the ending balance to 25,000 is computed as follows:

Beginning allowance balance      ??not given
–  Write-offs                                         (32,000)
= balance before adjustment             10,000
+ bad debt expense                                    ??
= balance allowance acct must be   (25,000)

The allowance account is a contra asset and must have a negative ending balance. A debit balance (positive) will only be an unadjusted amount.

Amounts on the balance sheet are always the final ending balance in the accounts.

Bad Debt Expense                      17,400
       Allowance for uncollectible accts    17,400

Increase bad debt expense
Increase the allowance account

B.
Allowance for uncollectible accts     8,000
       Accounts receivable                              8,000

Decrease the allowance account
Decrease accounts receivable

C.

$16,450 must be the ending balance in the allowance account

It is the first year of operations, so the beginning balance of the allowance account equals 0.  The adjustment to bad debt is computed as follows:

Beginning allowance balance              0
+ bad debt expense % sales       (17,400)
– write-offs                                       8,000
+ bad debt expense % a/r                    ??
= ending allowance balance      (16,450)  as calculated above 

The allowance account must be increased (credit) by $7,050 to get to the ending balance to be 16,450 calculated.  Bad debt expense is increased for the same amount

Bad Debt Expense                    7,050
       Allowance for uncollectible accts        7,050

D.
Total bad debt expense is everything recorded in the bad debt expense account:

Recorded using % sales           17,400
Recorded using % a/r                7.050
   Total bad debt expense         24,450

E. 

Net accounts receivable must be reported on the balance sheet.

Bad Debt Expense                   220,000
       Allowance for uncollectible accts        220,000

Increase bad debt expense
Increase the allowance account

B.
Allowance for uncollectible accts 47,000
       Accounts receivable                         47,000

Decrease the allowance account
Decrease accounts receivable

$56,100 must be the ending credit balance in the allowance account

It is the first year of operations, so the beginning balance of the allowance account equals 0.  The adjustment to bad debt is computed as follows:

Beginning allowance balance                 0
+ bad debt expense % sales      (220,000)
– write-offs                                      47,000
+ bad debt expense % a/r                    ??
= ending allowance balance       (56,100)  as calculated above 

The allowance account must be decreased (debit) by $116,900 to get to the ending balance to 56,100.  Bad debt expense is decreased for the same amount

Allowance for uncollectible accts   116,900
       Bad Debt Expense                             116,900

Too much expense was recorded during the year using the % of sales method and the expense must be decreased.

D.
Accounts Receivable                  758,000
– allowance for u.a.                      (56,100)
= net Accounts Receivable        701,900

1)  credit sales for the current period
2)  collections from customers
3)  write-offs
4)  estimate of bad debt expense

and you must record the account that was paid that was previously written off.

1)
Accounts Receivable               875,000
       Sales                                               875,000

2)
Cash                                           832,000
       Accounts Receivable                   832,000

3)
Allowance for Uncollectible Accts  7,000
       Accounts Receivable                         7,000

4)
Bad debt expense                             2,765
       Allowance for uncollectible accts         2,765

Collection of the account previously written off:

Accounts Receivable                765
       Allowance for uncollectible accounts        765
Cash                                             765
       Accounts receivable                                     765

4)
Bad debt expense is recorded to the allowance account, so use this account to determine the amount recorded:

Beginning allowance account          (22,000)
+ – Bad debt expense                                  ??
– Write-offs                                              7,000
+ Write –off reversals                            (765)
Ending allowance account                (13,000)

Bad debt expense must be $2,765 in order for allowance balance to be $13,000.