Respuesta :
Answer:
a. journal entry to write off those two accounts
Bad Debts $10,400 (debit)
Oakley Co $2,700 (credit)
Brookes Co $7,700 (credit)
Being write off of Oakley Co and Brookes Co
b. entries to reinstate the account and record the cash received
Oakley Co $2,700 (debit)
Bad Debts $2,700 (credit)
Being reinstatement of Oakley Co account
Cash $2,700 (debit)
Oakley Co $2,700 (credit)
Being record of the cash received
Explanation:
a. journal entry to write off those two accounts
Recognize a Bad Debts expense and de-recognize the assets - Trade Receivables
b. entries to reinstate the account and record the cash received
Recognize the assets-Account Receivable and de-recognize the Bad Debt expense
Also, Recognize the Assets of Cash and De-recognize the Trade Receivables as a results of receipt of payment.
Answer:
a. Debit Allowance for doubtful debt $2,700
Debit Allowance for doubtful debt $7,700
Credit Account receivable $10,400
Being entries to write off uncollectible debts due from Oakley Co. and Brookes Co.
b. To reinstate the amount due from Oakley Co previously written off
Debit Accounts receivable $2,700
Credit Bad debt expense $2,700
Being entries to reinstate receivables due from Oakley Co.
Furthermore,
Debit Cash account $2,700
Credit Accounts receivable $2,700
Being entries to record cash received.
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debts.
