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ipn [44]
3 years ago
6

During 2021, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2021, cash

collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible. In 2022, the company writes off uncollectible accounts of $10,000. Required:
Business
1 answer:
vlada-n [284]3 years ago
6 0

Answer:

Uncollectible amounts $12,000 debit

_____ Allowance for uncollectible amounts $12,000 credit

(Being the record of uncollectible)

Allowance for uncollectible amounts $10,000 debit

______ Accounts receivables $100,000 credit

(To record write off 2021)

Balance of the Allowance accounts:

$12,500 - 10,000 = 2,500

Allowance uncollectible amounts $15,000 debit

_____ Accounts receivables $15,000 credit

(To record write off 2022)

Explanation:

•The concluding part of the above question is record the adjusting entry for uncollectible accounts on December 31 2021

• Record write off of accounts receivables in 2022

Sales $160,000

Collection $110,000

AR $50,000

The above is multiplied by 25% unexpected uncontrollable amount : $12,500

The Allowance method will not recognize the additional uncollectible amount expense when doing a writer off. It will only do it when the company does the adjusting entry considering their rates and ageing of their accounts

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The break-even point in dollar sales for the Retail segment equals to $175,000

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a. May 18

Dr Salaries expense $615000

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Explanation:

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Cr Social security tax payable $36900

(615000*6%)

Cr Medicare tax payable $9225

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Cr Social security tax payable $36,900 (615000*6%)

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