Question

During Year 1, its first year of operations, a company provides services on account of $126,000. By the end of Year 1, cash collections on these accounts total $93,000. The company estimates that 20% of the uncollected accounts will be uncollectible. In Year 2, the company writes off uncollectible accounts of $5,940.

Required:

1. Record the adjusting entry for uncollectible accounts on December 31, Year 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

   

2-a. Record the write-off of accounts receivable in Year 2. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

2-b. Calculate the balance of Allowance for Uncollectible Accounts at the end of Year 2 (before adjustment in Year 2).

3-a. Assume the same facts as above but assume actual write-offs in Year 2 were $8,910. Record the write-off of accounts receivable in Year 2. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

3-b. Assume the same facts as above but assume actual write-offs in Year 2 were $8,910. Calculate the balance of Allowance for Uncollectible Accounts at the end of Year 2 (before adjustment in Year 2).

Answer 1

The answer has been presented in in supporting sheet. For detailed answer refer to the supporting sheet.