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Doubtful Debts for the Elburn Company

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Journalize entries to record allowance for doubtful accounts. Please use attached Excel and follow the instructions.

Exercise E9-2 Journalize entries to record allowance for doubtful accounts using to different bases.
The ledger of Elburn Company at the end of the current year shows:
Accounts Receivable $110,000
Sales 840,000
Sales Returns and Allowances 28,000

Instructions: Please replace the Account titles with your choice of the Account name
Also, replace the Text explanation with your choice of an Explanation for the Entry
(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the
adjusting entry at December 31st, assuming Elburn determines that Coop's $1,400 balance is uncollectible.

Dec 31 Account title Value
Account title
Text explanation

(b) (1) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the
adjusting entry at December 31st, assuming bad debts are expected to be 1% of net sales.

Dec 31 Account title Value
Account title
Text explanation

(b) (2) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the
adjusting entry at December 31st, assuming bad debts are expected to be 10% of accounts receivable.

Dec 31 Account title Value
Account title
Text explanation

(c) (1) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the
adjusting entry at December 31st, assuming bad debts are expected to be 0.75% of net sales

Dec 31 Account title Value
Account title
Text explanation

(c) (2) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the
adjusting entry at December 31st, assuming bad debts are expected to be 6% of accounts receivable.

Dec 31 Account title Value
Account title
Text explanation

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Solution Summary

The solution explains various journal entries relating to doubtful accounts.

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Doubtful Accounts of Elburn Company

E9-2 The ledger of Elburn Company at the end of the current year shows Accounts Receivable
$110,000, Sales $840,000, and Sales Returns and Allowances $28,000.

Instructions

(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize
the adjusting entry at December 31, assuming Elburn determines that Copp's $1,400 balance
is uncollectible.

(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize
the adjusting entry at December 31, assuming bad debts are expected to be (1) 1%
of net sales, and (2) 10% of accounts receivable.

(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize
the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75%
of net sales and (2) 6% of accounts receivable.

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