In reviewing her accounts receivables on January 17, Genevieve is sadly reminded of the outstanding balance of $404 from Geoff Zanetti. Geoff Zanetti is the local lawyer that she knows whose company came into some financial difficulties in December 2022 so she decides to write off the account rather than pursuing collection. Unexpectedly, on February 20, Geoff Zanetti pays the original $400 owed. Genevieve asks you to help with the journal entries related to the above transactions.

 

It is now November 30, 2022, which is Purrfect Spa and Doggy Daycare's year-end. Sales and service revenue have slowed down so Genevieve has had time to record all of the journal entries. She has also recorded all of the adjusting entries except for the year-end adjustment for bad debts. Uncollectible accounts are approximately 3% of outstanding accounts receivable for the industry. Using this industry average, prepare the year-end adjusting entry. Genevieve asks you to prepare closing entries and a post-closing trial balance, after you have completed the year-end adjustment for bad debts. Purrfect Spa and Doggy Daycare Adjusted Trial Balance November 30, 2022 Debit $31,203 Credit Cash Accounts receivable 852 Allowance for doubtful accounts $12 Supplies Merchandise inventory Equipment Accumulated depreciation - Equipment Accounts payable Salaries payable Unearned revenue G. Shannara, capital G. Shannara, drawings 275 4,500 14,460 3,553 950 400 250 12,000 9,000 Service revenue 78,000 Sales 58,500 Cost of goods sold 41,175 Interest revenue 4 Advertising expense Depreciation expense Freight out Interest Expense 950 3,553 245 60 Rent expense Salaries expense Utilities expense Supplies expense Water expense 18,000 8,400 9,600 4,780 6,616 $153,669 Total $153,669