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15 April, 05:10

During 2021, its first year of operations, Pave Construction provides services on account of $144,000. By the end of 2021, cash collections on these accounts total $102,000. Pave estimates that 20% of the uncollected accounts will be uncollectible. In 2022, the company writes off uncollectible accounts of $7,560. Required:1. Record the adjusting entry for uncollectible accounts on December 31, 2021.2-a. Record the write-off of accounts receivable in 2022.2-b. Calculate the balance of Allowance for Uncollectible Accounts at the end of 2022 (before adjustment in 2022).3-a. Assume the same facts as above but assume actual write-offs in 2022 were $11,340. Record the write-off of accounts receivable in 2022.3-b. Assume the same facts as above but assume actual write-offs in 2022 were $11,340. Calculate the balance of Allowance for Uncollectible Accounts at the end of 2022 (before adjustment in 2022).

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  1. 15 April, 08:51
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    1) Debit Allowance for uncollectible accounts Adjustment $8,400 Credit Allowance for uncollectible accounts $8,400

    2 a) Debit Doubtful Debt $7,560 Credit Accounts Receivable $7,560

    b) Allowance for uncollectible accounts balance = $6,888

    3 a) Debit Doubtful Debt $11,340 Credit Accounts Receivable $11,340

    b) Allowance for uncollectible accounts balance = $6,132

    Explanation:

    2021

    Uncollected balance = $144,000 - $102,000 = $42,000

    Allowance for uncollectible Accounts = $42,000*20% = 8,400

    2 b) Uncollectible accounts balance = $42,000 - $7,560 = $34,440 * 20%

    = $6,888

    3 b) Uncollectible accounts balance = $42,000 - $11,340

    =30,660*20%

    =$6,132
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