On December 31, 2024, when its Allowance for Doubtful Accounts had a credit balance of...
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On December 31, 2024, when its Allowance for Doubtful Accounts had a credit balance of $1500, Acme Garden Supply Company estimates that 6% of its accounts receivable balance of $95,000 will become uncollectible. On March 3, 2025, Acme determined that Bernie Madoff's account of $950 was uncollectible. On May 15, 2025, Madoff paid the amount previously written off. Prepare the journal entries for December 31, 2024, March 3, 2025, and May 15, 2025.
Date Account Titles and Explanation Debit Credit (To reinstate an account previously written off) (To record payment on account in full)
Answer & Explanation
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On December 31, 2024, when its Allowance for Doubtful Accounts had a credit balance of $1500, Acme Garden Supply Company estimates that 6% of its accounts receivable balance of $95,000 will become uncollectible. On March 3, 2025, Acme determined that Bernie Madoff's account of $950 was uncollectible. On May 15, 2025, Madoff paid the amount previously written off. Prepare the journal entries for December 31, 2024, March 3, 2025, and May 15, 2025.