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In: Accounting

The following events occur for The Underwood Corporation during 2018 and 2019, its first two years...

The following events occur for The Underwood Corporation during 2018 and 2019, its first two years of operations.
  

June 12, 2018 Provide services to customers on account for $36,200.

September 17, 2018 Receive $21,000 from customers on account.

December 31, 2018 Estimate that 45% of accounts receivable at the end of the year will not be received.

March 4, 2019 Provide services to customers on account for $51,200.

May 20, 2019 Receive $10,000 from customers for services provided in 2018.

July 2, 2019 Write off the remaining amounts owed from services provided in 2018.

October 19, 2019 Receive $41,000 from customers for services provided in 2019.

December 31, 2019 Estimate that 45% of accounts receivable at the end of the year will not be received.

Solutions

Expert Solution

Journal entries

Date account and explanation debit credit
June 12 Account receivable 36200
Service revenue 36200
(To record service revenue)
Sep 17 Cash 21000
Account receivable 21000
(To record collection)
Dec 31 Bad debt expense (36200-21000)*45% 6840
Allowance for doubtful accounts 6840
(To record bad debt expense)
Mar 4 Account receivable 51200
Service revenue 51200
(To record service revenue)
May 20 Cash 10000
Account receivable 10000
(To record collection)
July 2 Allowance for doubtful account (36200-31000) 5200
Account receivable 5200
(To record write off)
Oct 19 Cash 41000
Account receivable 41000
(To record collection)
Dec 31 Bad debt expense (51200-41000)*45%-1640 2950
Allowance for doubtful accounts 2950
(To record bad debt expense)

ekkarill92 answered 9 months ago
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