Coffeldt Sign Company Uses the Allowance Method in Accounting for Uncollectible

question 113

Essay

Coffeldt Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 1% of net credit sales will eventually be uncollectible. Selected account balances at December 31, 2009, and December 31, 2010, appear below:
Instructions
(a) Record the following events in 2010.
Aug. 10 Determined that the account of Sue Lang for $1,000 is uncollectible.
Sept. 12 Determined that the account of Tom Woods for $4,000 is uncollectible.
Oct. 10 Received a check for $550 as payment on account from Sue Lang, whose account had previously been written off as uncollectible. She indicated the remainder of her account would be paid in November.
Nov. 15 Received a check for $450 from Sue Lang as payment on her account.
(b) Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2010.
(c) What is the balance of Allowance for Doubtful Accounts at December 31, 2010?

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Definitions:

ROM Exercises

Short for Range of Motion exercises, these are specific movements designed to maintain or increase the flexibility and mobility of joints.

Quad Cane

A mobility aid with a four-footed base, providing greater stability than a standard cane for people who are partially disabled or need additional support when walking.

Hemiparesis

Weakness on one side of the body, often a result of stroke or brain injury.

Ambulation

The act of walking or moving from one place to another using one's feet.