Dolan Company uses the allowance method to account for uncollectible accounts. Prepare the appropriate journal entries to record the following transactions during 2013. You may omit journal entry explanations.
June 20 The account of Sam Nolan for $1,000 was deemed to be uncollectible and is written off as a bad debt.
Oct. 14 Received a check for $1,000 from Sam Nolan, whose account had previously been written off as uncollectible.
Dec. 31 Use the following information for year-end adjusting entries:
The balance of Accounts Receivable and Allowance for Doubtful Accounts at year-end are a debit balance of $126,000 and a credit balance $2,900, respectively. It is estimated that bad debts will be 5% of accounts receivable.
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