Question

On January 1, Wei company begins the accounting period with a $49,000 credit balance in Allowance for Doubtful Accounts.On February 1, the company determined that $10,600 in customer accounts was uncollectible; specifically, $2,800 for Oakley Co. and $7,800 for Brookes Co. Prepare the journal entry to write off those two accounts.On June 5, the company unexpectedly received a $2,800 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.

Answer 1

The Journal entries are as follows:

(i) On February 1,

Allowance for doubtful accounts A/c Dr. $10,600

To Account receivable-Oakley Co $2,800

To Account receivable-Brookes Co $7,800

(To record write off)

(ii) (a) On June 5,

Account receivable-Oakley CO A/c Dr. $2,800

To Allowance for doubtful accounts $2,800

(To record amount reinstated)

(b) On June 5,

Cash A/c Dr. $2,800

To Account receivable-Oakley CO $2,800

(To record cash received)