Flounder Company has determined, based on several years' of collections history, that 3% of its accounts receivable will become
uncollectible. At the company's year end of December 31, 2020, Flounder carried a balance of $737,000 in accounts receivable. The
pre-closing credit balance in allowance for doubtful accounts was $5,700.
On January 15, 2021, Flounder determined that it would not be able to collect the $1,800 owed by BHT Inc. After several months of
repeated collections attempts and other legal activities on August 12, BHT paid Flounder $470 of the previously written-off
balance.
Prepare the necessary journal entries to record the above transactions. Assume that Flounder uses the allowance method for
accounting for impairments of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order
presented in the problem.)
Date
Account Titles and Explanation
ember 31, 2020
Jary 15, 2021
ust 12, 2021
ust 12, 2021
(To reinstate the account written-off and now
determined to be collectible)
Cash
Accounts Receivable
(Collection on account)
eTextbook and Media
List of Accounts
Save for Later
Debit
Credit
470
470
470
470
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