Answer:
The Underwood Corporation
Journal Entries for 2021 and 2022:
June 12, 2021:
Debit Accounts Receivable $33,200
Credit Service Revenue $33,200
To record the provision of services to customers on account.
September 17, 2021:
Debit Cash Account $18,500
Credit Accounts Receivable $18,500
To record the receipt of cash on account.
December 31, 2021:
Debit Uncollectible Expense $6,615
Credit Allowance for Doubtful Debts $6,615
To record 45% of accounts receivable estimated as uncollectible.
March 4, 2022:
Debit Accounts Receivable $48,200
Credit Service Revenue $48,200
To record the provision of services to customers on account.
Explanation:
a) Data and Calculations:
Accounts Receivable balance = $14,700 ($33,200 - $18,500)
45% of balance estimated as uncollectible = $6,615 (14,700 * 45%)
b) The Underwood Corporation uses the general journal to record transactions that occur on a daily basis. The journal identifies the accounts for each transaction and the ones to be debited and credited respectively.
