Exercise 9-5 Writing off receivables LO P2 On January 1, Wei Company begins the accounting period with a $30,000 credit balance in Allowance for Doubtful Accounts. On February 1, the company determined that $6,800 in customer accounts was uncollectible; specifically, $900 for Oakley Co. and $5,900 for Brookes Co. Prepare the journal entry to write off those two accounts. On June 5, the company unexpectedly received a $900 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.

Answer:

Wei Company

1. Journal Entries:

February 1:

Debit Allowance for Doubtful Accounts $6,800

Credit Accounts Receivable $6,800

To write-off the uncollectibles accounts of Oakley Co., $900 and Brookes Co., $5,900.

June 5:

Debit Accounts Receivable (Oakley Co.) $900

Credit Allowance for Doubtful Accounts $900

To reinstate the accounts of Oakley Co.

Debit Cash $900

Credit Accounts Receivable (Oakley Co.) $900

To record the receipt of cash from Oakley Co.

Explanation:

a) Data and Analysis:

January 1: Beginning balance of Allowance for Doubtful Accounts $30,000 credit

February 1: Allowance for Doubtful Accounts $6,800 Accounts Receivable $6,800 (Oakley Co., $900 and Brookes Co., $5,900)

June 5: Accounts Receivable (Oakley Co.) $900 Allowance for Doubtful Accounts $900

June 5: Cash $900 Accounts Receivable (Oakley Co.) $900

Banks offer various types of accounts, such as savings, checking, certificate of deposits, and money market, to attract customers as well as meet their specific needs.

a. True
b. False

Cariboo Manufacturing Company incurred a joint cost of $1,147,000 in the production of X and Y in a joint process. Presently, 3,300 of X and 2,900 of Y are being produced each month. Management plans to decrease X's production by 1,050 units in order to increase the production of Y by 1,400 units. Additionally, this change will require minor modifications, which will add $79,360 to the joint cost. This cost is entirely attributable to product Y. What is the amount of the joint costs allocable to X and Y before changes to existing production, assuming Cariboo allocates their joint costs according to the proportion of Y and X produced