The following events occur for The Underwood Corporation during 2012 and 2013, i
ID: 2361816 • Letter: T
Question
The following events occur for The Underwood Corporation during 2012 and 2013, its first two years of operations.
June 12, 2012 Provide services to customers on account for $36,900.
September 17, 2012 Receive $11,000 from customers on account.
December 31, 2012 Estimate that 30% of accounts receivable at the end of the year will not be received.
March 4, 2013 Provide services to customers on account for $69,000.
May 20, 2013 Receive $19,500 from customers for services provided in 2012.
July 2, 2013 Write off the remaining amounts owed from services provided in 2012.
October 19, 2013 Receive $15,400 from customers for services provided in 2013.
December 31, 2013 Estimate that 45% of accounts receivable at the end of the year will not be received.
Given this, I need help with finding the answer to the last one, which is on December 31, 2013 - Estimate that 45% of accounts receivable at the end of the year will not be received. THANK YOU
Explanation / Answer
2012: Receivables: june + 36900 september - 11000 December 2012: allowance for doubful accounts 7,770 (25900-11000= 25900*0.30=7770) ending of receivables 25900 2013 March receivables +69000 May received 19,500 for 2012 amount left of 2012 receivables 6400 July write off allowance for doubtful account has a 1,370 debit since 24.7% was actually not paid instead of 30% expected Bad debt expense 7770 Allowance for doubful accounts 7770 Allowance for doubtful account 1370 Bad debt expense 1370 write off: Allowance for doubtful accounts 6400 accounts receivable 6400 October Receivables + 15,400 December (to answer your question) Total receivables: 69,000+15,400 = 84,400 * 45% = $37,980 ***hope I got it right***
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