6. Adjusted the accounting records to reflect uncollectible accounts expense for
ID: 2333732 • Letter: 6
Question
6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible. 2019 1. Wrote off an uncollectible account for $650 2. Provided $140.000 of services on account 3. Provided $20,000 of services and collected cash. 4. Collected $122,000 cash from accounts receivable 5. Paid $30,000 of salaries expense for the year 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectibleExplanation / Answer
Assets Event Cash + Account Receivable - Allowance = Liabilities + Common Stock + Retained Earning Opening Balance $ 1,12,000 + $ 27,000 - $ 1,350 = $ - + $ 10,000 + $ 1,27,650 1 + $ -650 - $ -650 = + + NA 2 + $ 1,40,000 - = + + $ 1,40,000 Service Revenue 3 $ 20,000 + - = + + $ 20,000 Service Revenue 4 $ 1,22,000 + $ -1,22,000 - = + + NA 5 $ -30,000 + - = + + $ -30,000 Salaries Expenses 6 + - $ 2,218 = + + $ -2,218 Bad Debt Expenses Closing Balance $ 2,24,000 $ 44,350 $ 2,918 $ 10,000 $ 2,55,432 Closing Retained Earning = $ 44,350 Uncollectable Amount 5% of $ 44,350 = $ 2,218
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