Accounting Geniuses (Genii) I need help with my homework!
 

I dont even know where to start with these, I'm on the chapter about uncollectible accounts. Can anyone help me with these problems?

1. Company X bases its estimate for uncollectible accounts on sales. For december 2002, the company had $20,000 in total sales and $5,000 in credit sales. The company estimates that 1% of credit sales will not be collected. Prepare the journal entry for the estimate.

2. Company X found out that customer A is in bankruptcy and will not be paying his debt to Co. X. A owes $500 to X. Prepare the hournal entry.

3. Surprisingly, Customer A pas the $500 five months later. Prepare the entries to reinstate the account receivable and receive payment on the account.

come on, I know at least one of you out there is educated.. stimulate your mind

my answer for number 1 is

uncollectible accounts expense 50
Allowance for doubtful accounts 50

Ask me in a year...I'll know the answer then...

well, if you adjust it wouldn't it mean that it would raise from 1% to 10% would not be collected...

500/5000 (10%) or 550/5000 (11%)

shot in the dark here

and then adjust it back to 1% after they are paid 5 months later

I found a good sample problem in the book that takes you step by step, thanks anyone who tried to help :)