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.

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

mauve company permits employees to occasionally use the copying machine for personal purposes