4- At the end of its first year of operations- December 31- 2014- Dard.docx

1. 4. At the end of its first year of operations, December 31, 2014, Darden Inc. reported the following information. What should be the balance in accounts receivable at December 31, 2014, before subtracting the allowance for doubtful accounts? Accounts receivable, net of allowance for doubtful accounts $963,600 Customer accounts written off as uncollectible during 2014 22,400 Bad debt expense for 2014 88,800 Solution Journal Entries : 1) Bad debt expense for 2014 - Debit Credit Bad Debt Expense Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $88800 Allowance for doubtful accountsÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â $88800 2) Customer accounts written off as uncollectible during 2014 - Debit Credit Allowance for doubtful accountsÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $66400

2. Accounts ReceivableÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $66400 ($66400 = $88800 - $22400) Therefore, Balance in accounts receivable at December 31, 2014 before subtracting the allowance for doubtful accounts should be $963600 - $66400 = $897200

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4- At the end of its first year of operations- December 31- 2014- Dard.docx

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