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, 2021 Provide services to customers on account for $29,600. September 17, 2021 Receive $15,500 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 $44,600. 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 $35,500 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. 2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts. Cash Accounts Receivable December 31, 2021 December 31, 2021 December 31, 2022 December 31, 2022 Allowance for Uncollectible Accounts December 31, 2021 December 31, 2022

Answer 1

Solution:

2)

Cash account
17 Sept 2021	$15,500
31 Dec 2021 balance	$15,500
20 May 2022	$10,000
19 Oct 2022	$35,500
31 Dec 2022 Balance	$25,500

Accounts receivable
12 Jun 2021	$29,600	17 Sept 2021	$15,500
31 Dec 2021 Balance	$14,100
4 Mar 2022	$44,600	20 May 2022	$10,000
		2 Jul 2022	$4,100
		19 Oct 2022	$35,500
31 Dec 2022 Balance	$9,100

Allowance for Uncollectible accounts
		31 Dec 2021	$6,345
		31 Dec 2021	$6,345
2 Jul 2022	$4,100	31 Dec 2022	$1,850
		31 Dec 2022 Balance	$4,095

Working;

31 Dec 2021 bad debt expense = ($29,600 -$15,500)*45%

=$6,345.

31 Dec 2022 bad debt expense =(44,600 -$35,500)*45% -(6,345 -4,100)

=$4,095 -$2,245

=$1,850

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