Allowance Problem

The following transactions relate to uncollectible accounts for the year ended 12/31/9B: Jan 20 – Reinstated the account of Henry Ellis, which had been written off in the previous year as uncollectible and received $2,000 cash in full payment of Ellis’ account. Jan 29 – Wrote of the $4,000 balance owed by S. Smith who is bankrupt. May 10 – Received 30% of the $9,000 balance owed Lawlor, a bankrupt customer, and wrote off the remainder as uncollectible. Sep 24 – Reinstated the account of Brown, which had been written off two years earlier, and received $700 cash in full payment of Brown’s account. Dec. 30 – Wrote of the following accounts as uncollectible (compound entry): Ames - $600, Bosco - $1,000, Evans - $900, George - $400. Dec 31 – Based on an aging of the $250,000 total A/R, it was estimated that $10,000 of A/R would be uncollectible. Record the adjusting entry for uncollectible accounts for the year. Allowance for D/A 1/1/9B 11,000 Cr.

Required: A) Record the entries in the general journal & post all debits & credits that affect the Allowance for D/A account. B) Calculate the net realizable A/R that would be reported on the Balance Sheet. C) Re-do the last entry assuming that the estimate for uncollectible accounts was 1% of the sales of $1,000,000. D) Calculate the net realizable A/R that would be reported on the Balance Sheet.