Question

exercise 9 - 5 (algo) writing off receivables lo p2
on january 1, wel company begins the accounting period with a $45,000 credit balance in allowance for doubtful accounts.
a. on february 1, the company determined that $9,800 in customer accounts was uncollectible; specifically, $2,400 for oakley company and $7,400 for brookes company. prepare the journal entry to write off those two accounts.
b. on june 5, the company unexpectedly received a $2,400 payment on a customer account, oakley company, that had previously been written off in part a. prepare the entries to reinstate the account and record the cash received.
view transaction list
journal entry worksheet
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record the reinstatement of oakleys account, if necessary.
note: enter debits before credits.
date general journal debit credit
june 05

Explanation:

Step1: Write - off uncollectible accounts

When writing off uncollectible accounts, we debit the Allowance for Doubtful Accounts and credit Accounts Receivable for each customer.
Debit: Allowance for Doubtful Accounts $9,800
Credit: Accounts Receivable - Oakley Company $2,400
Credit: Accounts Receivable - Brookes Company $7,400

Step2: Reinstate the written - off account

To reinstate the written - off account of Oakley Company, we debit Accounts Receivable and credit Allowance for Doubtful Accounts.
Debit: Accounts Receivable - Oakley Company $2,400
Credit: Allowance for Doubtful Accounts $2,400

Step3: Record the cash received

When recording the cash received from Oakley Company, we debit Cash and credit Accounts Receivable.
Debit: Cash $2,400
Credit: Accounts Receivable - Oakley Company $2,400

Answer:

Date	General Journal	Debit	Credit
	Accounts Receivable - Oakley Company		$2,400
	Accounts Receivable - Brookes Company		$7,400
June 5	Accounts Receivable - Oakley Company	$2,400
	Allowance for Doubtful Accounts		$2,400
June 5	Cash	$2,400
	Accounts Receivable - Oakley Company		$2,400