The Travel-Right Company Uses the Allowance Method to Provide for Losses

Essay

The Travel-Right Company uses the allowance method to provide for losses from uncollectible accounts. Record the following selected transactions on page 5 of a general journal, assuming the company also uses a cash receipts journal. Omit descriptions.

Dec. 31 Recorded an adjusting entry for the estimated loss from uncollectible accounts for 2019. The estimate is based on 0.5 percent of total credit sales. The total of the credit sales for 2019 was $260,000. Allowance for Doubtful Accounts has a credit balance of $175.
2020
Apr. 15 Wrote off the account of Brandon Reed, amounting to $650, as uncollectible. Nov. 20 Received a check for $650 from Brandon Reed in payment of his account,
which was written off on April 15.
Dec. 31 Recorded an adjusting entry for the estimated loss from uncollectible accounts for 2020. The estimate is based on 0.5 percent of total credit sales. The total of the credit sales for 2020 was $224,000. Allowance for Doubtful Accounts has a debit balance of $200.