Libre Answers

The credit manager of Montour Fuel has gathered the following information about the company's accounts receivable and credit losses during the current year:

Uncollectible accounts expense is estimated at an amount equal to 2.5 percent of net credit sales.

Uncollectible accounts expense is recognized by adjusting the balance in the Allowance for Doubtful Accounts to the amount indicated in the year-end aging schedule. The balance in the allowance account at the beginning of the current year was $25,000. (Consider the effect of the write-offs during the year on the balance in the Allowance for Doubtful Accounts.)

The company uses the direct write-off method of accounting for uncollectible accounts.

Prepare one journal entry summarizing the recognition of uncollectible accounts expense for the entire year under each of the above independent assumptions. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.)

Shown is the information needed to prepare a bank reconciliation for Warren Electric at December 31.

At December 31, cash per the bank statement was $15,200; cash per the company's records was $19,000.

Two debit memoranda accompanied the bank statement: service charges for December of $24, and a $825 check drawn by a customer, Jane Jones, marked NSF.

Cash receipts of $10,000 on December 31 were not deposited until January 4.

The following checks had been issued in December but were not included among the paid checks returned by the bank: no. 620 for $800, no. 630 for $2,800, and no. 641 for $3,449.

a. Prepare a bank reconciliation at December 31.

b. Prepare the necessary journal entry or entries to update the accounting records.