Question

Estimate that 40% of accounts receivable at the end of the year will not be receivable

The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2021 Provide services to customers on account for $30, 200. September 17, 2021 Receive $16,000 from customers on account. December 31, 2021 Estimate that 409 of accounts receivable at the end of the year will not be received. March 4, 2022 Provide services to customers on account for $45,200. May 20, 2022 Receive $10,000 from customers for services provided in 2021. July 2. 2022 Write of the remaining amounts owed from services provided in 2021. October 19, 2022 Receive $36,000 from customers for services provided in 2022. December 31, 2022 Estimate that 40% of accounts receivable at the end of the year will not be received Required: 1. Record transactions for each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.)

Answer 1

| Date General Jouranl Debit Credit $ 30,200 12-Jun-21 Accounts Receivable Service Revenue (Services provided on account) $ 30,200 $ 16,000 17-Sep-21 Cash Accounts Receivable (Cash received from customer) $ 16,000 $ 5,680 31-Dec-21 Bad debt expense Allowance for Doubtful Accounts (estimated uncollectables recorded) $ 5,680 $ 45,200 04-Mar-22 Accounts Receivable Service Revenue (Services provided on account) $ 45,200 $ 10,000 20-May-22 Cash Accounts Receivable ( Cash received from customer) $ 10,000

$ 4,200 02-Jul-22 Allowance for Doubtful Accounts Accounts Receivable (Accounts receivable not collected written off) $ 36,000 19-Oct-22 Cash Accounts Receivable (Cash received from customer) $ 36,000 $ 2,200 31-Dec-22 Bad debt expense Allowance for Doubtful Accounts (estimated uncollectables recorded) $ 2,200

Working Notes: 1) Allowance for doubtful accounts for the year ended 31-12-2021 = ($ 30200 - $ 16000) * 40%= $ 5.680 2) Accounts receivable written off on 02-07-2022 = $ 30200- $ 16000 - $ 10000 = $ 4200 3) Allowance for doubtful accounts for the year ended 31-12-2022 = ( $45200 - $36000* 40% = $ 3.680 4) Bad debt expense for the year 2022 = $ 3680 - ($ 5680 - $ 4200 ) = $ 2,200