contestada

During 2021, its first year of operations, a company provides services on account of $256,000. By the end of 2021, cash collections on these accounts total $133,000. The company estimates that 11% of accounts receivable will be uncollectible. Record the adjustment for uncollectible accounts on December 31, 2021.

Respuesta :

Answer:

The Record for the adjustment for uncollectible accounts on December 31, 2021 would be the following:

31/12/2021                                       Debit  Credit

Bad Debts Expense                  $   9,250.00  

Allowance for doubtful accounts              $  9,250.00

(To record bad debt expense)  

Explanation:

In order to Record the adjustment for uncollectible accounts on December 31, 2021 we would have to make the following calculation:

Bad Debts Expense=(services on account-cash collections)*11%

Bad Debts Expense=($256,000-$133,000)*11%

Bad Debts Expense=$13,5330

Therefore, the journal entry would be the following:

31/12/2021                                       Debit  Credit

Bad Debts Expense                  $   9,250.00  

Allowance for doubtful accounts              $  9,250.00

(To record bad debt expense)  

Otras preguntas