Question

The general ledger of Pop's Fireworks includes the following account balances in 2021 Credit Debit $ 23,200 46,500 $ 4,200 9,700 95,000 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Supplies Notes Receivable (8%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Service Revenue Salaries Expense utilities Expense Supplies Expense Totals 14,380 146,000 30,990 126,800 71,900 27,200 18.700 $322.200 $322,200 In addition, the following transactions occurred during 2021 and are not yet reflected in the account balances above June 3 Provide additional services on account for $17,000. All services on account include terms 2/1e, n/3e. June 8 Receive cash from customers within 10 days of the services being provided on account. The customers were originally charged $10,000. November 15 write off customer accounts of $5,500 as uncollectible. The following information is available on December 31. a. Estimate that 10% of the balance of accounts receivable after the transactions listed above) will not be collected. b. Accrue interest on the note receivable of $30,000, which was accepted on October 1, 2021. Interest is due each September 30. Requirement General Journal General Ledger Income Trial Balance Statement Balance Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.) View transaction list Journal entry worksheet Record the estimate of future bad debts. Note: Enter debits before credits. Date Debit Credit General Journal Dec 31, 2021 Bad Debt Expense Allowance for Uncollectible Accounts

Answer 1

Credit Accounts tittle Jun-03 Accounts Receivables Service revenue Debit $ 17,000 $17,000 Jun-08 Cash Discount allowed Accounts Receivables $ $ 9,800 200 $10,000 $ 5,500 Nov-15 Allowance for uncollectable accounts Accounts Receivables $ 5,500 Bad debts expense is expected to be 10% of accounts receivable In case of percentage on accounts receivable "Bad debts expense" is amount to be adjusted to closing balance of "allowance for doubtful accounts" Bad debts expense = accounts receivables * Percentage of bad debts = $ 48,000*10% (Refer working note-1) $ 4,800 A Balance in allowance for doubtful debt $ (1,300) B (Refer working note-2) Balance to be created $ 6,100 A-B Credit General journal Bad debts expense Allowance for uncollectable accounts Debit $ 6,100 $ 6,100

working note-1 Accounts Receivables, Beginning balance Add: Service revenue Less: Cash Collected Less: Accounts receivables write off Accounts Receivables, Ending balance before adjustment $ 46,500 $ 17,000 $(10,000 $ (5,500) $ 48,000 working note-2 Allowance for uncollectable accounts, Beginning balance $ 4.200 Less: Accounts receivables write off $ (5,500) Allowance for uncollectable accounts, Ending balance before adjustment | $ (1,300)