Question

On January 1, 2019, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,215. During the first 11 months of the year, bad debts expense of $21,561 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2019, was $9,739. Required: a. What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.) b. As the result of a comprehensive analysis, it is determined that the December 31, 2019, balance of the Allowance for Bad Debts account should be $9,271. Show the adjustment required in the journal entry format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Answer:

(a) The bad debt write-offs for 11 months can be calculated by subtracting the November 30 balance from the total of the beginning.

Bad - debt write offs:

= Allowance for Bad Debts + bad debts expense - Allowance for Bad Debts account at November 30, 2019

= $13,215 + $21,561 - $9,739

= $25,037

(b)  Allowance for Doubtful debt:

= Allowance for Bad Debts account at November 30, 2019 - Allowance for Bad Debts account at December 31, 2019

= $9,739 - $9,271

= $468

The journal entry for the above calculation is as follows:

Allowance for doubtful accounts       Dr.   $468

To Accounts receivables                                        $468