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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 $38,600.
September		17,		2021		Receive $23,000 from customers on account.
December		31,		2021		Estimate that 45% of accounts receivable at the end of the year will not be received.
March		4,		2022		Provide services to customers on account for $53,600.
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 $43,000 from customers for services provided in 2022.
December		31,		2022		Estimate that 45% of accounts receivable at the end of the year will not be received.

Stuck on the values of the December 31, 2022 entry

Answer 1

THE UNDERWOOD CORPORATION
Journal entries for transaction done 2021 and 2022
Date	Account Title and Explanation	Debit	Credit
June 12,2021	Accounts Receivable	$38,600
	Service Income		$38,600
	(to record the service provided to customers on account)
Sept 17,2021	Cash	$23,000
	Accounts Receivable		$23,000
	(to record the amount received from customers on
	account)
Dec 31,2021	Bad Debt Expenses	$7,020
	Allowance for Doubtful Debts		$7,020
	(to record the estimated amount of account receivables
	which would not be received)
Mar 4.2022	Accounts Receivable	$53,600
	Service Income		$53,600
	(to record the service provided to customers on account)
May 20,2022	Allowance for Doubtful Debts	$1,420
	Bad Debts Recovered		$1,420
	(to record the reversal of the original recording of the bad
	debt in 2021 by the amount received against the
	allowance made for doubtful debts in 2021)
May 20,2022	Cash	$10,000
	Accounts Receivable		$10,000
	(to record the amount received from customers for the
	services provided in 2021)
July 2,2022	Allowance for Doubtful Debts	$5,600
	Accounts Receivable		$5,600
	(to write off the remaining amount owed for the serviced
	provided in 2021)
Oct 19,2022	Cash	$43,000
	Accounts Receivable		$43,000
	(to record the amount received from customers on
	account)
Dec 31,2021	Bad Debt Expenses	$4,770
	Allowance for Doubtful Debts		$4,770
	(to record the estimated amount of account receivables
	which would not be received)
Working Notes
T-accounts for Accounts Receivable and Allowance for Doubtful Debts
Accounts Receivable
Date	Account Title	Debit	Credit
June 12,2021	To Service Income	$38,600
Sept 17,2021	By Cash		$23,000
Dec 31,2021	By Balance c/f		$15,600
	Total	$38,600	$38,600
Jan 1,2022	To Balance b/d	$15,600
Mar 4.2022	To Sales	$53,600
May 20,2022	By Cash		$10,000
July 2,2022	By Allowance for Doubtful Debts		$5,600
Oct 19,2022	By Cash		$43,000
Dec 31,2021	By Balance c/f		$10,600
	Total	$69,200	$69,200
Allowance for Doubtful Debts
Date	Account Title	Debit	Credit
Dec 31,2021	By Bad Debts		$7,020
Dec 31,2021	To Balance c/f	$7,020
Date		$7,020	$7,020
Jan 1,2022	By Balance b/d		$7,020
May 20,2022	To Bad Debts Recovered	$1,420
July 2,2022	To Accounts Receivable	$5,600
Dec 31,2021	By Bad Debts		$4,770
Dec 31,2021	By Balance c/f	$4,770
		$11,790	$11,790
Ending Balance of Accounts Receivable on Dec 31,2021			$15,600
Less: Allowance for Doubtful Debts for 2021 @ 45%			$7,020
Accounts Receivable as shown in Balance Sheet			$8,580
Ending Balance of Accounts Receivable on Dec 31,2022			$10,600
Less: Allowance for Doubtful Debts for 2022 @ 45%			$4,770
Accounts Receivable as shown in Balance Sheet			$5,830
Against the net accounts receivable of $ 8,580 for 2021,the amount
received from the customers was $ 10,000. This means that the excess
amount of $ 1,420 was received against the receivables which have been
treated as doubtful and have been charged to the income statement.
Hence, $ 1,420 would treated as other income in the year 2022,the
nature of such income being the Bad debts recovered