Emery Nurseries used the allowance method to record the fo
Question and Solution
Emery Nurseries used the allowance method to record the following transactions, adjusting entries, and closing entries during the year ended December 31, 20--: Feb. 9 Received 60% of the $5,000 balance owed by Patty’s Petunias, a bankrupt business, and wrote off the remainder as uncollectible. May 28 Reinstated the account of Danielle Bell, which had been written off in the preceding year, and received $2,400 cash in full settlement. Aug. 16 Wrote off the $8,200 balance owed by Rich Bouie as uncollectible. Oct. 5 Reinstated the account of Bonnie McCelland, which had been written off in the preceding year, and received $3,600 cash in full settlement. Dec. 28 Wrote off the following accounts as uncollectible, in compound entry form: Bloudeck & Rhodes, $14,450; Creative Landscapers, $16,100; Ramona Randol, $12,750. 31 Based on an aging analysis of the $980,000 of accounts receivable, it was estimated that $58,700 will be uncollectible. Made the adjusting entry. 31 Made the entry to close the appropriate account to Income Summary. Selected accounts and beginning balances on January 1, 20--, are as follows: 122.1 Allowance for Bad Debts $52,000 credit 313 Income Summary –– 532 Bad Debt Expense –– REQUIRED 1. Open the three selected accounts. 2. Enter the transactions and the adjusting and closing entries in a general journal. After each entry, post to the three accounts named. 3. Determine the net realizable value as of December 31.