Question

Required information The following information applies to the questions displayed below. The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2821 Provide services to customers on account for $38,000. September 17, 2021 Receive $22,500 from customers on account. December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2022 Provide services to customers on account for $53,800. May 20, 2022 Receive $10,000 from customers for services provided in 2021. July 2, 2022 Write off the remaining amounts owed from services provided in 2021. October 19, 2022 Receive $42,588 from customers for services provided in 2022. December 31, 2022 Estimate that 45% 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

Solution:

Journal Entries - Underwood Corporation
Date	Particulars	Debit	Credit
12-Jun-21	Accounts receivables Dr	$38,000.00
	To Service revenue		$38,000.00
	(To record service revenue)
17-Sep-21	Cash Dr	$22,500.00
	To Accounts receivables		$22,500.00
	(To record collection from customer)
31-Dec-21	Bad debts expense Dr [($38,000 - $22,500)*45%]	$6,975.00
	To Allowance for doubtful accounts		$6,975.00
	(To record bad debt expense)
4-Mar-22	Accounts receivables Dr	$53,000.00
	To Service revenue		$53,000.00
	(To record service revenue)
20-May-22	Cash Dr	$10,000.00
	To Accounts receivables		$10,000.00
	(To record collection from customer)
2-Jul-22	Allowance for doubtful accounts Dr	$5,500.00
	To Accounts receivables		$5,500.00
	(To write off receivables)
19-Oct-22	Cash Dr	$42,500.00
	To Accounts receivables		$42,500.00
	(To record collection from customer)
31-Dec-22	Bad debts expense Dr [($10,500*45%) - $1,475]	$3,250.00
	To Allowance for doubtful accounts		$3,250.00
	(To record bad debt expense)