Answer:
uncollectible amounts 12,500 debit
allowance uncollectible amounts 12,500 credi
--to record allowance--
allowance uncollectible amounts 10,000 debit
accoutns receivables 10,000 credit
--to record write-off 2021--
Balance of the allowance accounts:
12,500 - 10,000 = 2,500
allowance uncollectible amounts 15,000 debit
accoutns receivables 15,000 credit
--to record write-off 2022--
Explanation:
sales 160,000
collection <u> 110,000</u>
AR 50,000
times 25% expected uncollectible amount: 12,500
The allowance method will not recognize additional uncollectible amount expense when doing a write-off it will only do it when the company does the adjusting entry considering their rates and agings of their accounts.
