Prepare all journal entries for 20x2 concerning the followin

Prepare all journal entries for 20x2 concerning the following data for a medical clinic that peforms effective laser surgery that corrects vision. Suhc procedures are not covered by third party payers. Consider the following balances of the medical clinic on 12/31 20x1; Gross Receivables from Individual Patietns. $225,000 and Allowance for Doubtful Receivables, $50,000, which makes Net Receivables $175,000. During 20x2, total billings to individual patients were $2.5 million. Past experience indicated that 10% of such individual billings would ultimately be uncollectible. Write-offs of bad debts during 20x1 were $10000.

Solution

Accounts Receivable 2500000      Sales Revenue 2500000 Bad debts expense 250000       Allowance for Doubtful Receivables 250000 Allowance for Doubtful Receivables 10000        Accounts Receivable 10000