Answer:
What journal entry did Pincus record to write off uncollectible accounts during 2021
In 2021, the company wrote off uncollectible accounts of $10,800.
Dr Allowance for Uncollectible Accounts $ 10,800
Cr Accounts receivable $ 10,800
and to recognize bad debt expense for 2021?
Pincus estimates that 5% of the accounts receivable balance at 12/31/2021 will prove uncollectible
Dr Bad Debt Expense $ 1,520
Cr Allowance for Uncollectible Accounts $ 1,520
Explanation:
Pincus provided a total of $268,000 of services on account
Dr Accounts receivable $ 268,000
Cr Sales $ 268,000
In 2021, the company wrote off uncollectible accounts of $10,800.
Dr Allowance for Uncollectible Accounts $ 10,800
Cr Accounts receivable $ 10,800
If the company use the allowance method to account for bad debts, at the moment of the write off the company debits the Allowance for Uncollectible Accounts that was previously estimated with a credit to account receivable, to reflect the new accounts receivable balance.
By the end of 2021, cash collections on accounts receivable totaled $226,800
Dr CASH $ 226,800
Cr Accounts receivable $ 226,800
BALANCE
Dr Accounts receivable $ 30,400
Pincus estimates that 5% of the accounts receivable balance at 12/31/2021 will prove uncollectible
Dr Bad Debt Expense $ 1,520
Cr Allowance for Uncollectible Accounts $ 1,520
