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Write-off of accounts receivable

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BE9-4 At the end of 2006, Endrun Co. has accounts receivable of $700,000 and an allowance
for doubtful accounts of $54,000. On January 24, 2007, the company learns that its receivable
from Oswego Inc. is not collectible, and management authorizes a write-off of $6,400.
(a) Prepare the journal entry to record the write-off.
(b) What is the cash realizable value of the accounts receivable (1) before the write-off and
(2) after the write-off?
BE9-5 Assume the same information as BE9-4. On March 4, 2007, Endrun Co. receives payment
of $6,400 in full from Oswego Inc. Prepare the journal entries to record this transaction.

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(a) Prepare the journal entry to record the write-off.

The write is done against the allowance account. The journal entry would be
Allowance for doubtful accounts Dr 6,400
Accounts Receivable Cr 6,400

(b) What is the cash realizable value of the accounts receivable (1) before the write-off and
(2) after the write-off?

The cash realizable value ...

Solution Summary

The solution explains the journal entries relating to accounts receivable write off

$2.19
See Also This Related BrainMass Solution

Estimate Bad Debt Write-off and Net Accounts Receivable

At the end of 2008, Tindal Company has accounts receivable of $1,200,000 and an
allowance for doubtful accounts of $60,000. On February 28, 2009, Tindal Company
determined that the receivable from Fendi Company of $8,000 will not be collected,
and management authorized its write-off.

Prepare the journal entry for Tindal Company to write off the Fendi receivable.

DR CR
Bad debt expense 52,000
Allowance for doubtful accounts 52,000

What is the net realizable value of the Tindal Company's account receivable
before the write off the Fendi receivable?

Accounts receivable $1,200,000
Amount estimated to be uncollectable (60,000)
Net Realizable Value $1,140,000

What is the net realizable value of the Tindal Company's accounts receivable
after the write off of the Fendi receivable?

Accounts receivable $1,200,000
Amount estimated to be uncollectable
Net Realizable Value $-

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