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During 2021, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2021, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible. In 2022, the company writes off uncollectible accounts of $10,000. Required:

1. Record the adjusting entry for uncollectible accounts on December 31, 2021. (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 2022. (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 2022 (before adjustment in 2022).3-a. Assume the same facts as above but assume actual write-offs in 2022 were $15,000. Record the write-off of accounts receivable in 2022. (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 2022 were $15,000. Calculate the balance of Allowance for Uncollectible Accounts at the end of 2022 (before adjustment in 2022).

Respuesta :

TomShelby

Answer:

uncollectible amounts 12,500 debit

      allowance uncollectible amounts 12,500 credi

--to record allowance--

allowance uncollectible amounts 10,000 debit

     accoutns receivables                    10,000 credit

--to record write-off 2021--

Balance of the allowance accounts:

12,500 - 10,000 = 2,500

allowance uncollectible amounts 15,000 debit

     accoutns receivables                    15,000 credit

--to record write-off 2022--

Explanation:

sales         160,000

collection  110,000

AR              50,000

times 25% expected uncollectible amount: 12,500

The allowance method will not recognize additional uncollectible amount expense when doing a write-off it will only do it when the company does the adjusting entry considering their rates and agings of their accounts.

anthougo

1) The record of the adjusting entry for uncollectible accounts on December 31, 2021 for Pave Construction is as follows:

December 31, 2021:

Debit Bad Debts $12,500

Credit Allowance for Uncollectible Accounts $12,500

  • To record the allowance for uncollectible accounts.

2-a) The record of the write-off of accounts receivable in 2022 for Pave Construction is as follows:

December 31, 2022:

Debit Allowance for Uncollectible Accounts $10,000

Credit Accounts Receivable $10,000

  • To record the write-off of uncollectible accounts.

2-b) The calculation of the balance of Allowance for Uncollectible Accounts at the end of 2022 is $2,500 credit ($12,500 - $10,00).

3-a) If the actual write-offs in 2022 were $15,000, the recording of the write-off of accounts receivable for Pave Construction in  2022 is as follows:

December 31, 2022:

Debit Allowance for Uncollectible Accounts $15,000

Credit Accounts Receivable $15,000

  • To record the write-off of uncollectible accounts.

3-b) The calculation of the balance of Allowance for Uncollectible Accounts at the end of 2022 is $2,500 debit ($12,500 - $15,00).

Data and Calculations:

Credit Service Revenue = $160,000

Cash collections = $110,000

Balance = $50,000 ($160,000 - $110,000)

Estimated Allowance for Uncollectible Accounts = 25% or $12,500 ($50,000 x 25%)

Uncollectible accounts written off = $10,000

Uncollectible accounts written off = $15,000

Learn more about adjusting entries for uncollectible accounts at https://brainly.com/question/25654164

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