Montana Inc. had the following transactions relating to uncollectible accounts during 2016:
|
Jan. |
22 |
Wrote off J. Asanti’s account of $400 as uncollectible |
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Mar. |
6 |
Collected from Z. Byrd $200 that had been written off in 2015 |
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July |
4 |
Received $600 from M. Peron (Peron’s previous balance was $1,400); no further payments are expected and the balance was written off |
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Sept. |
7 |
Wrote off R. Ngeun’s account for $700 |
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Dec. |
31 |
Analysed accounts receivable, revealing the following: |
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a. |
Accounts to be written off: |
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|
R. Bouchard |
$600 |
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S. O’Malley |
800 |
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C. Macintosh |
200 |
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b. |
Ageing of accounts receivable: |
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Required:
- Assume that there was a credit balance of $3,000 in the Allowance for Doubtful Accounts general ledger account at December 31, 2015. Prepare the entry to write off the uncollectible accounts at December 31, 2016.
- Prepare the appropriate adjusting entry to set up the required balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2016.
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