1. Record transactions for each date. (If no entry is required for a transaction
ID: 2556939 • Letter: 1
Question
1. Record transactions for each date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.
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3. Calculate the net realizable value of accounts receivable at the end of 2018 and 2019.
[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 $29,600. September 17, 2018 Receive $15,500 from customers on account. December 31, 2018 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2019 Provide services to customers on account for $44,600. 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 $35,500 from customers for services provided in 2019.
Explanation / Answer
1) 2018 Jun-12 Accounts receivable 29600 Service revenue 29600 Sep-17 Cash 15500 Accounts receivable 15500 Dec-31 Bad debts expense (14100*40%) 5640 Allowance for uncollectible accounts 5640 2019 Mar-04 Accounts receivable 44600 Service revenue 44600 May-20 Cash 10000 Accounts receivable 10000 Jul-02 Allowance for uncollectible accounts 4100 Accounts receivable (14100-10000) 4100 Oct-19 Cash 35500 Accounts receivable 35500 Dec-31 Bad debts expense (9100*45%-1540) 2555 Allowance for uncollectible accounts 2555 2) CASH 2018 2018 Sep-17 15500 2019 2019 May-20 10000 Oct-19 35500 ACCOUNTS RECEIVABLE 2018 2018 Jun-12 29600 Sep-15 15500 End Bal 14100 2019 2019 Mar-04 44600 May-20 10000 Jul-02 4100 Oct-19 35500 End bal 9100 ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS 2018 2018 Dec-31 5640 End Bal 5640 2019 2019 Jul-02 4100 Dec-31 2555 End Bal 4095 3) NET REALIZABLE VALUE OF ACCOUNTS RECEIVABLE: 2018 Accounts receivable 14100 Less: Allowance for uncollectible accounts 5640 Net realizable value 8460 2019 Accounts receivable 9100 Less: Allowance for uncollectible accounts 4095 Net realizable value 5005
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