Write-Off of Uncollectible Account Receivable
on January 10, Winston, Inc

question 79

Essay

Write-off of uncollectible account receivable
On January 10, Winston, Inc.'s trial balance included the following accounts:
On January 11, Len Palmer, a major customer, declares bankruptcy and thus, Winston determines that a receivable from Palmer in the amount of $3,400 is worthless.
(a) In the space provided, prepare the journal entry that Winston should record to write-off the account receivable from Len Palmer on January 11.
(b) Compute the net realizable value of Winston's accounts receivable at each of the following dates:
January 10 (before write-off of Palmer's account) $_______________
January 11 (immediately after write-off of Palmers' account) $_______________
$\begin{array}{|c|c|c|}\hline & \text { Debit } & \text { Credit } \\\hline\text { Accounts Receivable.. } & 220,000 & \\\hline \text { Allowance for Doubtful Accounts } & & \$ 7,200 \\\hline\end{array}$ $\begin{array}{|l|l|}\hline 20 \_ & \quad\quad\text {General Journal }\quad\quad\quad\quad \\\hline \text { Jan. } 11 & \\\hline\end{array}$

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Definitions:

Time Effectively

Refers to managing one's time in such a way as to maximize productivity and efficiency.

Managing

The process of dealing with or controlling things or people, often within the context of a business or organization.

Employee Theft

The act of stealing from an employer by an employee, which can include theft of money, time, or company property.

Small Business

A small business is typically an independently owned and operated entity, characterized by limited revenue, fewer employees, and smaller market reach compared to larger businesses.