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In: Accounting

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:...

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:

Accounts Debit Credit
Cash $ 27,100
Accounts Receivable 15,200
Allowance for Uncollectible Accounts $ 4,000
Supplies 4,100
Notes Receivable (6%, due in 2 years) 20,000
Land 80,500
Accounts Payable 8,900
Common Stock 100,000
Retained Earnings 34,000
Totals $ 146,900 $ 146,900

During January 2021, the following transactions occur:

January 2 Provide services to customers for cash, $51,100.
January 6 Provide services to customers on account, $88,400.
January 15 Write off accounts receivable as uncollectible, $3,700.
January 20 Pay cash for salaries, $33,000.
January 22 Receive cash on accounts receivable, $86,000.
January 25 Pay cash on accounts payable, $7,100.
January 30 Pay cash for utilities during January, $15,300.

The following information is available on January 31, 2021.

  1. The company estimates future uncollectible accounts. The company determines $4,500 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
  2. Supplies at the end of January total $750.
  3. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
  4. Unpaid salaries at the end of January are $35,100.

What would this journal entry be:

The company estimates future uncollectible accounts. The company determines $4,500 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Record the adjusting entry for uncollectible accounts.

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Expert Solution

ekkarill92 answered 1 year ago
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