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Answer:
a.
Date Account Title Debit Credit
XX-XX Bad debts expense $31,000
Allowance for doubtful debts $31,000
b. Current assets section of balance sheet
Current Assets
Cash $90,000
Accounts Receivable $569,000
Inventory $130,000
Prepaid Insurance $ 7,500
Total $796,000
Accounts Receivable = Unadjusted accounts received - allowance for doubtful debt:
= 600,000 - 31,000
= $569,000
a. Journal entry to record the estimated uncollectibles.
Date account and explanation Debit Credit
Dec 31 Bad debt expense 31,000
Allowance for doubtful accounts 31,000
b) Prepare the current assets section of the balance sheet for Gavin Company.
Cash 90,000
Account receivable 600,000
Less: Allowance for doubtful account (31,000) 569,000
Inventory 130,000
Prepaid insurance 7,500
Total current assets 796,500
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