Question

In: Accounting

Required information [The following information applies to the questions displayed below.] The following events occur for...

Required information

[The following information applies to the questions displayed below.]

The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations.

June 12, 2021 Provide services to customers on account for $33,800.
September 17, 2021 Receive $19,000 from customers on account.
December 31, 2021 Estimate that 40% of accounts receivable at the end of the year will not be received.
March 4, 2022 Provide services to customers on account for $48,800.
May 20, 2022 Receive $10,000 from customers for services provided in 2021.
July 2, 2022 Write off the remaining amounts owed from services provided in 2021.
October 19, 2022 Receive $39,000 from customers for services provided in 2022.
December 31, 2022 Estimate that 40% of accounts receivable at the end of the year will not be received.

Required:

1. Record transactions for each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.

3. Calculate net accounts receivable at the end of 2021 and 2022.

Solutions

Expert Solution

Journal Entries for the given transactions

June 21 2021 for service providing

Accounts Receivable Account $33 800

   Services Account $33 800

(Being the services Provided on account)

September 17 2021 For Receiving Cash from customer

Cash Account $19 000

Accounts Receivable Account $19 000

(Being the Cash received from customer)

December 31 2021 for provision for accounts receivable

Accounts Receivable at the end of the period = $33 800 - $19 000 = $14 800

Provision for Accounts Receivable = $14 800 X40% = $5 920

Provision for Accounts Receivable account $5920

Accounts Receivable Account $5920

Being the provision provided on accounts receivable)

Net Accounts Receivable at the end of the period 2021 = $33800-$19000-$5920 =$8880

March 4 2022 for providing services

Accounts Receivable Account    $48800

Services Account $48800

(Being the services Provided on account)

May 20 2022 for Receipt of cash from customer for the year 2021

Cash Account $10 000

   Accounts Receivable Account $10000

(Being the Cash received from customer)

July 2 2022 for written off as bad debt

Bad Debt Account    $4800

   Accounts Receivable Account $4800

(Being the writing accounts receivable as bad debt relating to year 2021 = 33800 -19000-10000=4800)

October 19 2022 for cash received from customer

Cash Account $390000

   Accounts receivable Account $39000

(Being the Cash received from customer)

December 31 2022 for provision on accounts receivable

Net Accounts Receivable at the end of the period = $48 800 - $39 000 = $9800

Provision for Accounts Receivable = $9800 X40% = $3 920

Provision for Accounts Receivable account $3920

Accounts Receivable Account $3920

Being the provision provided on accounts receivable)

Net Accounts Receivable at the end of the period 2022 = $48800-$39000-$3920 =$5880

Thanks

ekkarill92 answered 1 month ago
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