Answer:
- 1. Record the adjusting entry for uncollectible accounts on December 31, 2021.
Dr Bad Debt Expense $ 13.800
Cr Allowance for Uncollectible Accounts $ 13.800
- 2-a. Record the write-off of accounts receivable in 2022.
Dr Allowance for Uncollectible Accounts $ 12.420
Cr Accounts Receivable $ 12.420
- 2-b. Calculate the balance of Allowance for Uncollectible Accounts at the end of 2022
Final Balance 2022
Cr Allowance for Uncollectible Accounts $ 1.380
- 3-a. Assume the same facts as above but assume actual write-offs in 2022 were $18,630. Record the write-off of accounts receivable in 2022.
Dr Allowance for Uncollectible Accounts $ 18.630
Cr Accounts Receivable $ 18.630
- 3-b. Assume the same facts as above but assume actual write-offs in 2022 were $18,630. Calculate the balance of Allowance for Uncollectible Accounts at the end of 2022
Final Balance 2022
Cr Allowance for Uncollectible Accounts $ 7.176
Explanation:
Initial Balance
Dr Accounts Receivable $ 152.000
Cash collections on these accounts total $106,000
Dr CASH $ 106.000
Cr Accounts Receivable $ 106.000
New Balance
Dr Accounts Receivable $ 46.000
Pave estimates that 30% of the uncollected accounts will be uncollectible.
Dr Bad Debt Expense $ 13.800
Cr Allowance for Uncollectible Accounts $ 13.800
FINAL BALANCE 2021
Dr Accounts Receivable $ 46.000
Cr Allowance for Uncollectible Accounts $ 13.800
In 2022, the company writes off uncollectible accounts of $12,420
Dr Allowance for Uncollectible Accounts $ 12.420
Cr Accounts Receivable $ 12.420
Final Balance 2022
Dr Accounts Receivable $ 33.580
Cr Allowance for Uncollectible Accounts $ 1.380
2-b. Calculate the balance of Allowance for Uncollectible Accounts at the end of 2022
Dr Bad Debt Expense $ 10.074
Cr Allowance for Uncollectible Accounts $ 10.074
a. Assume the same facts as above but assume actual write-offs in 2022 were $18,630.
Record the write-off of accounts receivable in 2022.
Dr Allowance for Uncollectible Accounts $ 18.630
Cr Accounts Receivable $ 18.630
3-b. Assume the same facts as above but assume actual write-offs in 2022 were $18,630.
Calculate the balance of Allowance for Uncollectible Accounts at the end of 2022
Final Balance 2022
Dr Accounts Receivable $ 14.950
Cr Allowance for Uncollectible Accounts $ 7.176
