Question
Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2021, Pearl provides services on account of $589,000. Of this amount, $79,000 remains receivable at
Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2021, Pearl provides services on account of $589,000. Of this amount, $79,000 remains receivable at the end of the year. An aging schedule as of December 31, 2021, is provided below.
Age Group | Amount Receivable | Estimated Percent Uncollectible | ||||||
Not yet due | $ | 39,000 | 5 | % | ||||
0-90 days past due | 15,900 | 10 | % | |||||
91180 days past due | 10,900 | 30 | % | |||||
More than 180 days past due | 13,200 | 80 | % | |||||
Total | $ | 79,000 | ||||||
Required:
1. Calculate the allowance for uncollectible accounts.
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Record December 31, 2021, adjusting entry, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $4,900
- Record the adjusting entry for Uncollectible Account
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On July 19, 2022, a customers account balance of $7,900 is written off as uncollectible. Record the write-off.
- Record write off of actual bad debts.
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September 30, 2022, the customer whose account was written off in part 3 unexpectedly pays the full amount. Record the cash collection.
- Record the entry to re-establish the account previously written off.
Note: Enter debits before credits.
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- Record cash received on account.
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