Question

Cash	$	60,300
Accounts Receivable		28,200
Allowance for Uncollectible Accounts					$	3,800
Inventory		37,900
Notes Receivable (5%, due in 2 years)		31,200
Land		171,000
Accounts Payable						16,400
Common Stock						236,000
Retained Earnings						72,400
Totals	$	328,600			$	328,600

During January 2021, the following transactions occur:

January		1		Purchase equipment for $21,100. The company estimates a residual value of $3,100 and a five-year service life.
January		4		Pay cash on accounts payable, $11,100.
January		8		Purchase additional inventory on account, $98,900.
January		15		Receive cash on accounts receivable, $23,600.
January		19		Pay cash for salaries, $31,400.
January		28		Pay cash for January utilities, $18,100.
January		30		Sales for January total $236,000. All of these sales are on account. The cost of the units sold is $123,000.

The following information is available on January 31, 2021.

1. Depreciation on the equipment for the month of January is calculated using the straight-line method.
2. Accrued interest revenue on notes receivable for January.
3. Unpaid salaries at the end of January are $34,200.
4. Accrued income taxes at the end of January are $10,600.
5. The company estimates the amount of their bad debt expense and uncollectible accounts at the end of each month. Out of the total accounts receivable shown on the General Ledger (See General Ledger Tab for total A/R balance) on January 31, the company determines $4,600 is past due, and 50% of these past due amounts are estimated to be uncollectible (Hint: multiply the percentage by the $ amount of the A/R that is past due). The remaining accounts receivable balance on January 31 is current (total A/R minus amount that is past due), and 3% of the current balance is estimated to be uncollectible.

The company estimates future uncollectible accounts. The company determines $4,600 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% 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.

Answer 1

As requested clearly in the question, the adjusting entry is prepared only for uncollectible accounts.

If you need help on the remaining adjusting entries or journal entries then please do comment, i will help you.

Hence, the question is answered as per the requirement.

Date	Account Titles and Explanation	Debit	Credit
Jan. 31, 2021	Bad Debts (see working note)	$9,380
	Allowance for Uncollectible Accounts		$9,380
	(To record the adjusting entry for uncollectible accounts)

Working notes:

Accounts receivable	$28,200
Less: Cash received	($23,600)
Add: Credit sales	$236,000
Balance of Accounts receivable at the end	$240,600
Bad debts ({$4,600*50/100} + [$240,600 - $4,600 = $236,000*3/100])	$9,380