In: Accounting
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.
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) | |||