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The following transactions were completed by Irvine Company during the current fiscal year ended December $31$:

Feb. $8$ Received $40\%$ of the $$18,000$ balance owed by DeCoy Co$.,$ a bankrupt business, and wrote off the remainder as uncollectible.

May $27$ Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $$7,350$ cash in full payment of Seth$$s account.

Aug. $13$ Wrote off the $$6,400$ balance owed by Kat Tracks Co$.,$ which has no assets.

Oct. $31$ Reinstated the account of Crawford Co$.,$ which had been written off in the preceding year as uncollectible. Journalized the receipt of $$3,880$ cash in full payment of the account.

Dec. $31$ Wrote off the following accounts as uncollectible $($compound entry$)$: Newbauer Co$.,$ $$7,190$; Bonneville Co$.,$ $$5,500$; Crow Distributors, $$9,400$; Fiber Optics, $$1,110.$

Dec. $31$ Based on an analysis of the $$1,785,000$ of accounts receivable, it was estimated that $$35,700$ will be uncollectible. Journalized the adjusting entry.

$1.$ Record the January $1$ credit balance of $$26,000$ in a T$-$account for Allowance for Doubtful Accounts.

$2.$

A$.$ Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

B$.$ Post each entry that affects the following selected T$-$accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

$3.$ Determine the expected net realizable value of the accounts receivable as of December $31($after all of the adjustments and the adjusting entry$).$

$4.$ Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December $31$ had been based on an estimated expense of $$ of $1\%$ of the net sales of $$18,200,000$ for the year, determine the following:

A$.$ Bad debt expense for the year.

B$.$ Balance in the allowance account after the adjustment of December $31.$

C$.$ Expected net realizable value of the accounts receivable as of December $31.$CHART OF ACCOUNTS

Irvine Company

General Ledger

ASSETS

$110$ Cash

$111$ Petty Cash

$121$ Accounts Receivable$-$DeCoy Co$.$

$122$ Accounts Receivable$-$Seth Nelsen

$123$ Accounts Receivable$-$Kat Tracks Co$.$

$124$ Accounts Receivable$-$Crawford Co$.$

$125$ Accounts Receivable$-$Newbauer Co$.$

$126$ Accounts Receivable$-$Bonneville Co$.$

$127$ Accounts Receivable$-$Crow Distributors

$128$ Accounts Receivable$-$Fiber Optics

$129$ Allowance for Doubtful Accounts

$131$ Interest Receivable

$132$ Notes Receivable

$141$ Merchandise Inventory

$145$ Office Supplies

$146$ Store Supplies

$151$ Prepaid Insurance

$181$ Land

$191$ Store Equipment

$192$ Accumulated Depreciation$-$Store Equipment

$193$ Office Equipment

$194$ Accumulated Depreciation$-$Office Equipment

LIABILITIES

$210$ Accounts Payable

$211$ Salaries Payable

$213$ Sales Tax Payable

$214$ Interest Payable

$215$ Notes Payable

EQUITY

$310$ Common Stock

$311$ Retained Earnings

$312$ Dividends

REVENUE

$410$ Sales

$610$ Interest Revenue$1.$ Record the January $1$ credit balance of $$26,000$ in a T$-$account for Allowance for Doubtful Accounts.

$2.$

B$.$ Post each entry that affects the following selected T$-$accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is a $5$ by $4$ collemn

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