At December 31 2016 Finzelberg Company had a credit balance

At December 31, 2016, Finzelberg Company had a credit balance of $19,300 in Allowance for Doubtful Accounts. During 2017, Finzelberg wrote off accounts totaling $11,000. One of those accounts ($1,600) was later collected. At December 31, 2017, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $22,500. Prepare journal entries to record the 2017 transactions of Finzelberg Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Solution

Answer:

At December 31,2016, Finzelberg Company had a credit balance of $ 19,30

Finzelberg Company wrote off accounts totaling $11,000.

1. Allowance for Doubtful Accounts Dr 11,000
To Accounts Receivable Cr 11,000

(Being Wrote of Accounts totalimg $ 11000)

One of those accounts ($1,600) was later collected.
2. Dr Accounts Receivable Dr 1,600
To Allowance for Doubtfull Accounts Cr 1,600

(Being amount collected )

3. Cash Dr 1,600
To Accounts Receivable Cr 1,600

(Being Cash Collected )

At December 31, 2016, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $22,500.
19,300 - 11000 + 1,600 = $9,900 balance before adjustment
22,500 - 9,900 = $12,600 adjustment
4.

Bad Debt Expense A/c Dr 12,600
To Allowance for Doubtful Accounts Cr 12,600

(Being amount transferred to Bad debt Account )