Smiths Restaurant Supply Corp manufacturer a variety of stai

Smith’s Restaurant Supply Corp. manufacturer a variety of stainless steel food services products. They make all sales on 30-day credit terms. Annual sales in 2019 are $30,000,000. At the end of 2018, accounts receivable were presented in the company\'s balance sheet as follows. Accounts receivable from clients $ 3,100,000 Less: Allowance for doubtful accounts 80,000 During 2019, $160,000 of specific accounts receivable were written off as uncollectible. Of the accounts written off, receivables totaling $16,000 were subsequently collected after they were written off, later in the year. At the end of the year, an aging of accounts receivable indicated a need for a $224,000 allowance to cover possible failure to collect the accounts currently outstanding. Required: Prepare the following general journal entries: 1. One entry to summarize all accounts written off against the Allowance for Doubtful Accounts during 2019. 2. The entries to record the $16,000 in accounts receivable that were subsequently collected. 3. The adjusting entry required at December 31, 2019, to increase the Allowance for Doubtful Accounts to $228,000. If no entry is required for a transaction or event, enter \"No journal entry required.\"

Solution

Journal entries: Accounts title and explanations Debit $ Credit $ Allowance for Uncollectible account Dr. 160000      Accounts receivable Account 160000 Accounts receivable Account Dr. 16000      Allowance for uncollectible account 16000 (for reinstating the account) Cash Account Dr. 16000      Accounts recievable Account 16000 Bad debts expense Account Dr. 288,000      Allowance for uncollectible account 288000 Note: Balance in Allowance: Beginning balance in Allowance: 80000 Add: Reinstated account 16000 Less: Account written off 160000 Debit balance in Allowance 64000 Required balance in Aallowance at the end 224000 Bad debts expense (64000+224000) 288000