Answer:
1)
February 2, 2018 Provide services to customers on account for $32,600.
Dr Accounts receivable 32,600
Cr Service revenue 32,600
July 23, 2018 Receive $22,500 from customers on account.
Dr Cash 22,500
Cr Accounts receivable 22,500
December 31, 2018 Estimate that 25% of uncollected accounts will not be received.
Dr Dad debt expense 2,525
Cr Allowance for doubtful accounts 2,525
April 12, 2019 Provide services to customers on account for $45,600.
Dr Accounts receivable 45,600
Cr Service revenue 45,600
June 28, 2019 Receive $6,000 from customers for services provided in 2018.
Dr Cash 6,000
Cr Accounts receivable 6,000
September 13, 2019 Write off the remaining amounts owed from services provided in 2018.
Dr Allowance for doubtful accounts 4,100
Cr Accounts receivable 4,100
October 5, 2019 Receive $40,500 from customers for services provided in 2019.
Dr Cash 40,500
Cr Accounts receivable 40,500
December 31, 2019 Estimate that 25% of uncollected accounts will not be received.
Dr Dad debt expense 2,850
Cr Allowance for doubtful accounts 2,850
Allowance for doubtful accounts = $1,575 (to cancel debit balance) + [($45,600 - $40,500) x 25%] = $1,575 + $1,275 = $2,850
2)
Cash Accounts receivable
Debit Credit Debit Credit
22,500 32,600
6,000 22,500
<u>40,500 </u> 45,600
69,000 6,000
4,100
<u> 40,500</u>
5,100
Allowance for doubtful accounts
Debit Credit
2,525
4,100
<u> 2,850</u>
1,275
3) net realizable value of accounts receivable = $5,100 - $1,275 = $3,825
