An Inexperienced Accountant Made the Following Entries Required: Prepare the Correcting Entries

question 89

Essay

An inexperienced accountant made the following entries. In each case, the explanation to the entry is correct. $$\begin{array} { | l | l | r | r | } \hline \text { Dec. 17 } & \text { Cash } & 4,410 & \\\hline & \begin{array} { l } \text { Trade Accounts Receivable } \\\text { (To record collection of Dec. 10 sales, net of } \\\$ 90 \text { sales discounter) }\end{array} & & 4,410 \\\hline 27 & \text { Cash } & 1,200 & \\\hline & \begin{array} { l } \text { Bad Debts Expense } \\\text { (Collection of account previously written off } \\\text { as uncollectible under allowance method) }\end{array} & & 1,200 \\\hline 31 & \text { Bad Debts Expense } & 5,000 & \\\hline & \begin{array} { l } \text { Trade Accounts Receivable } \\\text { (To reduce the receivables to their net } \\\text { fealizable value of } \$ 580,000 \text {. Balances } \\\text { before adjustment: } \\\text { Accounts Receivable } = \$ 600,000 \\\text { Allowance for Doubtful Accounts } = 15,000 \\\text { credit) }\end{array} & &5,000 \\\hline\end{array}$$ Required: Prepare the correcting entries.

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Definitions:

Organizational Stakeholders

Individuals or groups that have an interest or concern in the performance and decisions of an organization, such as employees, customers, suppliers, and investors.

Role Senders

Individuals or groups that have expectations about the behavior and performance of others in specific positions.

Directly Affected

Individuals or entities that experience the immediate consequences or benefits of an action or decision.

Economic Responsibility

The obligation of an organization to act in ways that serve both its own interests and the interests of its stakeholders, ensuring its actions maintain or enhance the economic status and conditions of its stakeholders.