Required information Skip to question [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: Accounts Debit Credit Cash $ 27,300 Accounts Receivable 15,300 Allowance for Uncollectible Accounts $ 4,200 Supplies 4,200 Notes Receivable (6%, due in 2 years) 21,000 Land 80,600 Accounts Payable 9,100 Common Stock 101,000 Retained Earnings 34,100 Totals $ 148,400 $ 148,400 During January 2021, the following transactions occur: January 2 Provide services to customers for cash, $52,100. January 6 Provide services to customers on account, $89,400. January 15 Write off accounts receivable as uncollectible, $3,900. January 20 Pay cash for salaries, $33,100. January 22 Receive cash on accounts receivable, $87,000. January 25 Pay cash on accounts payable, $7,200. January 30 Pay cash for utilities during January, $15,400. rev: 10_04_2016_QC_CS-64217, 10_02_2018_QC_CS-141245 a. The company estimates future uncollectible accounts. The company determines $4,600 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) b. Supplies at the end of January total $800. c. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31. d. Unpaid salaries at the end of January are $35,200. 2. Record adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:
| Accounts | Debit | Credit | |||||
| Cash | $ | 27,300 | |||||
| 15,300 | |||||||
| Allowance for Uncollectible Accounts | $ | 4,200 | |||||
| Supplies | 4,200 | ||||||
| Notes Receivable (6%, due in 2 years) | 21,000 | ||||||
| Land | 80,600 | ||||||
| Accounts Payable | 9,100 | ||||||
| Common Stock | 101,000 | ||||||
| 34,100 | |||||||
| Totals | $ | 148,400 | $ | 148,400 | |||
During January 2021, the following transactions occur:
| January | 2 | Provide services to customers for cash, $52,100. | ||
| January | 6 | Provide services to customers on account, $89,400. | ||
| January | 15 | Write off accounts receivable as uncollectible, $3,900. | ||
| January | 20 | Pay cash for salaries, $33,100. | ||
| January | 22 | Receive cash on accounts receivable, $87,000. | ||
| January | 25 | Pay cash on accounts payable, $7,200. | ||
| January | 30 | Pay cash for utilities during January, $15,400. |
rev: 10_04_2016_QC_CS-64217, 10_02_2018_QC_CS-141245
a. The company estimates future uncollectible accounts. The company determines $4,600 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
b. Supplies at the end of January total $800.
c. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
d. Unpaid salaries at the end of January are $35,200.
2. Record
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