BE8.2 (LO 1) Record the following transactions on the books of RAS Co.
a. On July 1, RAS Co. sold merchandise on account to Waegelein Inc. for $17,200, terms 2/10,
n/30.
b. On July 8, Waegelein Inc. returned merchandise worth $3,800 to RAS Co.
c. On July 11, Waegelein Inc. paid for the merchandise.
E8.3 (LO 1) Presented below are two independent situations.
Instructions
a. On January 6, Brumbaugh Co. sells merchandise on account to Pryor Group for €7,000, terms
2/10, n/30. On January 16, Pryor pays the amount due. Prepare the entries on Brumbaugh’s
books to record the sale and related collection. (Omit cost of goods sold entries.)
6-Jan Accounts receivable 7,000 2/10, n/30
Sales revenue 7,000
16-Jan Cash 6,860
Sales discount 140
Accounts receivable 7,000
E8.7 (LO 2) At December 31, 2024, Blanda Creations had a credit balance of €15,000 in Allowance
for Doubtful Accounts. During 2025, Blanda wrote off accounts totaling €11,000. One of those
accounts (€1,800) was later collected. At December 31, 2025, an aging schedule indicated that the
balance in Allowance for Doubtful Accounts should be €19,000.
Instructions
Prepare journal entries to record the 2025 transactions of Blanda.
1 Allowance for doubtful accounts 11,000
Accounts receivable 11,000
2 Accounts receivable 1,800
Allowance for doubtful accounts 1,800
3 Cash 1,800
Accounts receivable 1,800
Allowance for doubtful accounts
Balance 15,000
1 11,000 2 1,800
Balance 5,800
Adj 13,200
Balance 19,000
4 Bad debt expense 13,200
Allowance for doubtful accounts 13,200
E8.8 (LO 2) On December 31, 2025, Ling Industries estimated that 2% of its net accounts
receivable of ¥450,000 will become uncollectible (amounts in thousands). The company recorded
this amount as an addition to Allowance for Doubtful Accounts. The allowance account had a zero
balance before adjustment at December 31, 2025. On May 11, 2026, Ling determined that the Jeff
Shoemaker account was uncollectible and wrote off ¥1,100. On June 12, 2026, Shoemaker paid the
amount previously written off.
Instructions
Prepare the journal entries on December 31, 2025, May 11, 2026, and June 12, 2026.
31/12/2025 Bad debt expense 9,000
Allowance for doubtful accounts 9,000 (2%*450,000 - 0)
11/5/2026 Allowance for doubtful accounts 1,100
Accounts receivable 1,100
12/6/2026 Accounts receivable 1,100
Allowance for doubtful accounts 1,100
12/6/2026 Cash 1,100
Accounts receivable 1,100
Mingenback Ltd. 2025
Credit sales
Accounts receivable
Bad debt written off
b) Allowance method
Estimate of bad debt
Closing balance of Allowanc
Unadjusted balance of Allow
Bad debt expense for 2025
Adjusting entry
31/12/2025
c) Allowance method
Estimate of bad debt
Closing balance of Allowanc
Unadjusted balance of Allow
Bad debt expense for 2025
Adjusting entry
31/12/2014
d) Weakness of direct write o
Bad debt expense, which is
As a result, Revenue and re
ack Ltd. 2025
2,500,000
counts receivable 875,000
d debt written off 33,000
owance method
timate of bad debt 6% Accounts receivable
osing balance of Allowance 52,500 (875,000*6%)
nadjusted balance of Allowance 3,000 CR
d debt expense for 2025 49,500
Bad debt expense 49,500
Allowance for doubtful accounts 49,500
owance method
timate of bad debt 6% Accounts receivable
osing balance of Allowance 52,500 (875,000*6%)
nadjusted balance of Allowance 3,000 DR
d debt expense for 2025 55,500 (52,500+3,000)
Bad debt expense 55,500
Allowance for doubtful accounts 55,500
eakness of direct write off method
d debt expense, which is related to sale, is not recorded in the same period with Sales revenue (indeed after sales)
a result, Revenue and related expenses are not matched with each other to determine a correct profit or loss.
a Allowance method: only under al
b Allowance for doubtful accounts
Adj
c Allowance for doubtful accounts
Adj
d Jan-26
Allowance method: only under allowance method, the value of uncollectible is estimated and recorded in Allowance for doubtful accoun
Allowance for doubtful accounts
Closing balance = Unadjusted balance +Bad debt expense
11,750 1,000 10,750
CR
Bad debt expense 10,750
Allowance for doubtful accounts 10,750
Allowance for doubtful accounts
Closing balance = Unadjusted balance +Bad debt expense
11,750 -1,000 12,750
DR
Bad debt expense 12,750
Allowance for doubtful accounts 12,750
Allowance for doubtful accounts 3,000
Accounts receivable 3,000
Allowance for doubtful accounts