Question

Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $250,000 of services on account. In 2021, the company wrote off uncollectible accounts of $10,000. By the end of 2021, cash collections on accounts receivable totaled $210,000. Pincus estimates that 20 % of the accounts receivable balance at 12/31/2021 will prove uncollectible
What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 Record the write-offs of allowance for uncollectible accounts during 2021 Ngte: Enter debits before credits Event General Journal Debit Credit Record entry Clear entry View general journal

Answer 1

Answer:

Explanation:

first we will create the provision against debtors when it is confirmed we record the write off as follows :

Total Receivable Amount  250000  

Cash Received                  40000  

Net receivable                  210000  

 

Provision for bed debts  

               210000 * 20% 42000  

 

bed debt expense  42000  

provision for bed debts    42000

To record the 20% provision for bed debts  

 

Provision For debts 10000  

Account receiveable 10000

To record the bed expense write off