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Write-off of accounts receivable

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.

Solution Preview

(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