In: Accounting
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.
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.