The following information applies to the questions displayed below. The followin
ID: 2536975 • Letter: T
Question
The following information applies to the questions displayed below. The following events occur for The Underwood Corporation during 2018 and 2019, its first two years of operations. June 12, 2018 Provide services to customers on account for $30,200. September 17, 2018 Receive $16,000 from customers on account December 31, 2018 Estimate that 40% of accounts receivable at the end of the year will not be received. March 4, 2019 Provide services to customers on account for $45,200. May 20, 2019 Receive $10,000 from customers for services provided in 2018. July 2, 2019 Write off the remaining amounts owed from services provided in 2018. October 19, 2019 Receive $36,000 from customers for services provided in 2019. December 31, 2019 Estimate that 40% of accounts receivable at the end of the year will not be received.
Explanation / Answer
Entries:
workings:
Date Account Debit Credit Jun.12 2018 Accounts receivables $ 30,200 To Sales $ 30,200 [Entry to record sales on account] Sep.17 2018 Cash $ 16,000 To Accounts receivables $ 16,000 [Entry to record cash receipts from customers] Dec.31 2018 Bad debt expense $ 5,680 To Allowance for doubtful accounts $ 5,680 [Entry to record estimated bad debt expense] * see note no.1 for workings Mar.4 2019 Accounts receivables $ 45,200 To Sales $ 45,200 [Entry to record sales on account] May 20. 2019 Cash $ 10,000 To Accounts receivables $ 10,000 [Entry to record cash receipts from customers related to 2018 credit sales] Jul 2. 2019 Allowance for doubful debts $ 4,200 To Accounts receivables $ 4,200 [ Entry to write off balance of accouts receivables of 2018 credit sales] * see note no.2 for workings Oct.19 2019 Cash $ 36,000 To Accounts receivables $ 36,000 [Entry to record cash receipts from customers related to 2019 credit sales] Dec.31 2019 Bad debt expense $ 2,200 To Allowance for doubtful accounts $ 2,200 [Entry to record adjusting bad debt expense for the year] * see note no.3 for workingsRelated Questions
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