Question

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Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2021, Pearl provides services on account of $581,000. Of this amount, $71,000 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		$	31,000				4	%
0-90 days past due			15,100				20	%
91–180 days past due			10,100				25	%
More than 180 days past due			14,800				70	%
Total		$	71,000

Required:

1. Calculate the allowance for uncollectible accounts.

2. Record the December 31, 2021, adjusting entry, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $4,100 (credit). (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

3. On July 19, 2022, a customer’s account balance of $7,100 is written off as uncollectible. Record the write-off. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

4. On September 30, 2022, the customer whose account was written off in part 3 unexpectedly pays the full amount. Record the cash collection. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

--Requirement 1

Accounts receivables	% uncollectible	Allowance for Uncollectible Account
$31,000	4%	$1,240
$15,100	20%	$3,020
$10,100	25%	$2,525
$14,800	70%	$10,360
$71,000	ANSWER =	$17,145

--Requirement 2

Date	Accounts title	Debit	Credit
31-Dec-21	Uncollectible expense [or Bad Debt expense] (17145 - 4100)	$13,045
	Allowance for Uncollectible accounts		$13,045
	(Bad debt expense recorded)

--Requirement 3

Date	Accounts title	Debit	Credit
19-Jul-22	Allowance for Uncollectible accounts	$7,100
	Accounts receivables		$7,100
	(Account written off)

--Requirement 4

Date	Accounts title	Debit	Credit
30-Sep-22	Accounts receivables	$7,100
	Allowance for Uncollectible accounts		$7,100
	(Written off account reinstated)
30-Sep-22	Cash	$7,100
	Accounts receivables		$7,100
	(Cash received from written off account)