Concept explainers
A.
Direct write-off method:
This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting
Allowance method:
It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method,
To record: The
B.
To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.
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Financial & Managerial Accounting
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- Refer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.arrow_forwardPost the following July transactions to T-accounts for Accounts Receivable and Cash, indicating the ending balance (assume no beginning balances in these accounts): A. sold products to customers for cash, $8,500 B. sold products to customers on account, $2,900 C. collected cash from customer accounts, $1,600arrow_forwardBased on the data presented in Exercise 5-1, assume that the beginning balances for the customer accounts were zero, except for Tillman Inc., which had a 590 beginning balance. In addition, there were no collections during the period. a. Set up a T account for Accounts Receivable and T accounts for the four accounts needed in the customer ledger. b. Post to the T accounts. c. Determine the balance in the accounts. d. Prepare a listing of the accounts receivable customer balances as of May 31, 20Y3.arrow_forward
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