Alpha Company's Accounts Receivable and Allowance for Doubtful Accounts Balances

question 40

Essay

Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit) respectively, at the beginning of 2019. During 2019, a customer defaults on a $12,000 balance related to goods purchased during 2017. By the end of the year, the company had made credit sales of $2,400,000 and collected $2,200,000 on account. It now estimates that 1 percent of its credit sales will default.
A)Prepare the journal entry to record the write off the bad debt.
B)Prepare the adjusting entry to record bad debt expense for 2019.
C)What is the net accounts receivable balance at the end of the year?

• A)Prepare the journal entry to record the write off the bad debt.
• B)Prepare the adjusting entry to record bad debt expense for 2019.
• C)What is the net accounts receivable balance at the end of the year?

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Definitions:

Bronze

An alloy of copper and tin, known for its hardness and durability, used historically for making tools, weapons, and sculptures.

Copper

A chemical element with the symbol Cu and atomic number 29, known for its high electrical and thermal conductivity, and widely used in electrical wiring and coinage.

Political System

The structure of government and its institutions, which defines how power is obtained, distributed, and exercised within a society.

Ceremonial Objects

Items used in rituals or ceremonies that hold symbolic meaning or significance, often specific to particular cultures or religions.