Answer:
The adjusting entry for uncollectible accounts on December 31, 2021:
Debit Bad debts expense $9,600
Credit Allowance for uncollectible accounts $9,600
Explanation:
During 2021, Pave Construction provides services on account of $124,000. By the end of 2021, cash collections on these accounts total $92,000.
The balance of uncollected accounts on December 31, 2021 = $124,000 - $92,000 = $32,000
Pave estimates that 30% of the uncollected accounts will be uncollectible.
Estimated uncollectible = 30% x $32,000 = $9,600
The adjusting entry for uncollectible accounts on December 31, 2021:
Debit Bad debts expense $9,600
Credit Allowance for uncollectible accounts $9,600
