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recording and determining the effects of write offs recoveries and bad debt expense 727246

Recording and Determining the Effects of Write Offs, Recoveries, and Bad Debt Expense Estimates on the Balance Sheet and Income Statement

Academic Dishonesty Investigations Ltd. operates a plagiarism detection service for universities and community colleges.


1. Prepare journal entries for each transaction below.

a. On March 31, 10 customers were billed for detection services totaling $25,000.

b. On October 31, a customer balance of $1,500 from a prior year was determined to be uncollectible and was written off.

c. On December 15, a customer paid an old balance of $900, which had been written off in a prior year.

d. On December 31, $500 of bad debts were estimated and recorded for the year.

2. Complete the following table, indicating the amount and effect ( _ for increase, _ for decrease, and NE for no effect) of each transaction. Ignore income taxes.


Net Receivables

Net Sales

Income from Operations

















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