The following information applies to the questions displayed

The following information applies to the questions displayed below.J 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 $33,200 September 17, 2018 Receive $18,500 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 $48,200 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 $38,500 from customers for services provided in 2019 December 31, 2019 Estimate that 45% of accounts receivable at the end of the year will not be received.

Solution

Journal entries Date Accounts title and explanations Debit $ Credit $ 12-Jun Accounts receivable Account Dr. 33200      Service revenue 33200 17-Sep Cash account Dr. 18500     Accounts receivable Account 18500 31-Dec Bad debts expense Account Dr. 6615    Allowance for doubtful debt (33200-18500)45% 6615 2019 4-Mar Accounts receivable Account Dr. 48200      Service revenue 48200 20-May Accounts receivable Account Dr. 10000      Cash account 10000 2-Jul Allowance for doubtful debts Account Dr. 4700      Accounts receivable (33200-18500-10000) 4700 19-Oct Accounts receivable Account Dr. 38500      Cash account 38500 31-Dec Bad debt expense Acount Dr. 2450      Allowance for doubtful debts 2450 Note: Existing balance in Allowance Account: Allowance created in 2018 6615 Less: Wirtten off 4700 Balance 1915 Required balance 4365 (48200-38500)*45% Bad debts expense 2450