E5-22 The general ledger of Pop's Fireworks includes the following account balances in 2024: page 269 Accounts Debit Credit Cash $ 21,200 41,500 Accounts Receivable $ 2,200 6,700 Allowance for Uncollectible Accounts Supplies Notes Receivable (8%, due in 2 years) Land 10.000 85.000 12.300 106,000 29,900 124,800 Accounts Payable Common Stock Retained Earnings Service Revenue Salaries Expense Utilities Expense Supplies Expense Totals 70,900 24,200 15,700 $275,200 $275,200 In addition, the following transactions occurred during 2024 and are not yet reflected in the account balances above: 1. Provide additional services on account for $7,000. All services on account include terms 2/10, n/30. 2. Receive cash from customers within 10 days of the services being provided on account. The customers were originally charged $5,000. 3. Write off customer accounts of $1,500 as uncollectible. Required: 1. Record each of the transactions listed above. 2. Record the following adjusting entries on December 31. a. Estimate that 10% of the balance of accounts receivable (after transactions in requirement 1) will not be collected. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger to determine the total estimate of uncollectible accounts.) b. Accrue interest on the note receivable of $10,000, which was accepted on October 1, 2024. Interest is due each September 30. 3. Prepare an adjusted trial balance as of December 31, 2024, after updating account balances for transactions during the year (requirement 1) and adjusting entries at the end of the year (requirement 2). 4. Prepare an income statement for the period ended December 31, 2024. 5. Prepare a classified balance sheet as of December 31, 2024. 6. Record closing entries. 7. Analyze the following information: a. By how much does the year-end estimate of future uncollectible accounts reduce net income in 2024? b. What is the ending balance of Allowance for Uncollectible Accounts? c. What amount of cash is expected to be collected from accounts receivable
