Question
During Year 1, its first year of operations, a company provides services on account of $158,000. By the end of Year 1, cash collections on
During Year 1, its first year of operations, a company provides services on account of $158,000. By the end of Year 1, cash collections on these accounts total $109,000. The company estimates that 30% of the uncollected accounts will be uncollectible. In Year 2, the company writes off uncollectible accounts of $13,230.
Required:
1. Record the adjusting entry for uncollectible accounts on December 31, Year 1.
2-a. Record the write-off of accounts receivable in Year 2.
2-b. Calculate the balance of Allowance for Uncollectible Accounts at the end of Year 2 (before adjustment in Year 2).
3-a. Assume the same facts as above but assume actual write-offs in Year 2 were $19,845. Record the write-off of accounts receivable in Year 2.
3-b. Assume the same facts as above but assume actual write-offs in Year 2 were $19,845. Calculate the balance of Allowance for Uncollectible Accounts at the end of Year 2 (before adjustment in Year 2).
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