Record transactions related to accounts receivable (LO5–3, 5–5) The following events occur for Morris Engineering during 2018 and 2019, its first two years of operations. February 2, 2018 Provide services to customers on account for $38,000. July 23, 2018 Receive $27,000 from customers on account. December 31, 2018 Estimate that 25% of uncollected accounts will not be received. April 12, 2019 Provide services to customers on account for $51,000. June 28, 2019 Receive $6,000 from customers for services provided in 2018. September 13, 2019 Write off the remaining amounts owed from services provided in 2018. October 5, 2019 Receive $45,000 from customers for services provided in 2019. December 31, 2019 Estimate that 25% of uncollected accounts will not be received. Required: 1. Record transactions for each date. 2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts. 3. Calculate the net realizable value of accounts receivable at the end of 2018 and 2019.

Question

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Answer 1

Textbook Question

Chapter 5, Problem 5.3BP

Record transactions related to accounts receivable (LO5–3, 5–5)

The following events occur for Morris Engineering during 2018 and 2019, its first two years of operations.

February 2, 2018 Provide services to customers on account for $38,000.

July 23, 2018 Receive $27,000 from customers on account.

December 31, 2018 Estimate that 25% of uncollected accounts will not be received.

April 12, 2019 Provide services to customers on account for $51,000.

June 28, 2019 Receive $6,000 from customers for services provided in 2018.

September 13, 2019 Write off the remaining amounts owed from services provided in 2018.

October 5, 2019 Receive $45,000 from customers for services provided in 2019.

December 31, 2019 Estimate that 25% of uncollected accounts will not be received.

Required:

1. Record transactions for each date.

2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.

3. Calculate the net realizable value of accounts receivable at the end of 2018 and 2019.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

1.

Expert Solution

To determine

To record: The transactions of engineering M for each date.

Answer to Problem 5.3BP

Date	Account Title and Explanation		Debit ($)	Credit ($)
February 2,2018	Accounts receivable		38,000
		Service revenue		38,000
	( To record the service provided on account)
July 23,2018	Cash		27,000
		Accounts receivable		27,000
	( To record the receipt of cash on account)
December 31, 2018	Bad debt expense (2)		2,750
		Allowance for uncollectible accounts		2,750
	( To record the estimation of future bad debts)
April 12, 2019	Accounts receivable		51,000
		Service Revenue		51,000
	( To record the services provided on account)
June 28, 2019	Cash		6,000
		Accounts receivable		6,000
	( To record receipt of cash on account)
September 13, 2019	Allowance for uncollectible accounts		5,000
		Accounts receivable		5,000
	( To record the writing-off of actual bad debts)
October 5, 2019	Cash		45,000
		Accounts receivable		45,000
	( To record the receipt of cash from customer on account)
December 31, 2019	Bad debt expense (5)		3,750
		Allowance for uncollectible accounts		3,750
	( To record the estimation of future bad debts)

Table (1)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Working notes:

Calculate Estimate future bad debts On December 31, 2018:

$Accounts receivable=[Providing services on account on February 2, 2018−Received cash from customers on account on July 23, 2018]=$38,000−$27,000=$11,000$ (1)

$Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(1)×25%=$2,750$ (2)

Calculate Estimate future bad debts On December 31, 2019:

$Accounts receivable=[Providing services on account on April 12, 2019−Received cash from customers on account on June 28, 2019]=$51,000−$6,000=$45,000$ (3)

$[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2018−Write-off actual bad debts on September 13, 2019]=$2,750−$5,000Debit balance=($2,250)$ (4)

$Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6000(3)×25%+$2,250(4)=$3,750$ (5)

2.

Expert Solution

To determine

To post: Transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

Answer to Problem 5.3BP

For 2018:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
July 23,2018	Accounts receivable	$27,000
December 31, 2018	Balance (Balancing figure)	$27000

Table (2)

For 2019:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
January 1, 2019	Beginning balance	$27,000
June 28, 2019	Accounts receivable	$6,000
October 5, 2019	Accounts receivable	$45,000
December 31, 2019	Balance (balancing figure)	$78,000

Table (3)

For 2018:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
February 2, 2018	Service revenue	$38,000	July 23,2018	Cash	$27000
December 31, 2018	Balance (Balancing figure)	$11,000

Table (4)

For 2019:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
April 12, 2019	Service revenue	$51,000	June 28, 2019	Cash	$6,000
			September 13, 2019	Allowance for uncollectible accounts	$5,000
			October 5, 2019	Cash	45,000
December 31, 2019	Balance (balancing figure)	$6,000

Table (5)

For 2018:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
			December 31, 2018	Bad debt expense	$2,750

Table (6)

For 2019:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
September 13, 2019	Accounts receivable	$5,000	December 31, 2019	Bad debt expense	$3,750
			December 31, 2019	Balance (balancing figure)	$1,500

Table (7)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

3.

Expert Solution

To determine

To Calculate: The net realizable value of accounts receivable at the end of 2018 and 2019.

Answer to Problem 5.3BP

Calculate the net realizable value of accounts receivable at the end of 2018 and 2019:

Years	2018	2019
Total accounts receivable	$11,000	$6,000
Less: Allowance for uncollectible accounts	($2,750)	($1,500)
Net realizable value	$8,250	$4,500

Table (8)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Conclusion

Hence, the net realizable value of Engineering M for the year 2018 is $ 8,250 and for the year 2019 is $ 4,500.

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Students have asked these similar questions

Dexler Manufacturing has annual sales of $5.2 million, cost of goods sold of $2,000,000, average inventory of $1,200,000, and average accounts receivable of $800,000. Assume all of Dexler’s sales are on credit. What is the firm’s operating cycle? Right answer

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Subject: general accounting

Answer 2

Textbook Question

Chapter 5, Problem 5.3BP

Record transactions related to accounts receivable (LO5–3, 5–5)

The following events occur for Morris Engineering during 2018 and 2019, its first two years of operations.

February 2, 2018 Provide services to customers on account for $38,000.

July 23, 2018 Receive $27,000 from customers on account.

December 31, 2018 Estimate that 25% of uncollected accounts will not be received.

April 12, 2019 Provide services to customers on account for $51,000.

June 28, 2019 Receive $6,000 from customers for services provided in 2018.

September 13, 2019 Write off the remaining amounts owed from services provided in 2018.

October 5, 2019 Receive $45,000 from customers for services provided in 2019.

December 31, 2019 Estimate that 25% of uncollected accounts will not be received.

Required:

1. Record transactions for each date.

2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.

3. Calculate the net realizable value of accounts receivable at the end of 2018 and 2019.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

1.

Expert Solution

To determine

To record: The transactions of engineering M for each date.

Answer to Problem 5.3BP

Date	Account Title and Explanation		Debit ($)	Credit ($)
February 2,2018	Accounts receivable		38,000
		Service revenue		38,000
	( To record the service provided on account)
July 23,2018	Cash		27,000
		Accounts receivable		27,000
	( To record the receipt of cash on account)
December 31, 2018	Bad debt expense (2)		2,750
		Allowance for uncollectible accounts		2,750
	( To record the estimation of future bad debts)
April 12, 2019	Accounts receivable		51,000
		Service Revenue		51,000
	( To record the services provided on account)
June 28, 2019	Cash		6,000
		Accounts receivable		6,000
	( To record receipt of cash on account)
September 13, 2019	Allowance for uncollectible accounts		5,000
		Accounts receivable		5,000
	( To record the writing-off of actual bad debts)
October 5, 2019	Cash		45,000
		Accounts receivable		45,000
	( To record the receipt of cash from customer on account)
December 31, 2019	Bad debt expense (5)		3,750
		Allowance for uncollectible accounts		3,750
	( To record the estimation of future bad debts)

Table (1)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Working notes:

Calculate Estimate future bad debts On December 31, 2018:

$Accounts receivable=[Providing services on account on February 2, 2018−Received cash from customers on account on July 23, 2018]=$38,000−$27,000=$11,000$ (1)

$Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(1)×25%=$2,750$ (2)

Calculate Estimate future bad debts On December 31, 2019:

$Accounts receivable=[Providing services on account on April 12, 2019−Received cash from customers on account on June 28, 2019]=$51,000−$6,000=$45,000$ (3)

$[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2018−Write-off actual bad debts on September 13, 2019]=$2,750−$5,000Debit balance=($2,250)$ (4)

$Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6000(3)×25%+$2,250(4)=$3,750$ (5)

2.

Expert Solution

To determine

To post: Transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

Answer to Problem 5.3BP

For 2018:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
July 23,2018	Accounts receivable	$27,000
December 31, 2018	Balance (Balancing figure)	$27000

Table (2)

For 2019:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
January 1, 2019	Beginning balance	$27,000
June 28, 2019	Accounts receivable	$6,000
October 5, 2019	Accounts receivable	$45,000
December 31, 2019	Balance (balancing figure)	$78,000

Table (3)

For 2018:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
February 2, 2018	Service revenue	$38,000	July 23,2018	Cash	$27000
December 31, 2018	Balance (Balancing figure)	$11,000

Table (4)

For 2019:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
April 12, 2019	Service revenue	$51,000	June 28, 2019	Cash	$6,000
			September 13, 2019	Allowance for uncollectible accounts	$5,000
			October 5, 2019	Cash	45,000
December 31, 2019	Balance (balancing figure)	$6,000

Table (5)

For 2018:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
			December 31, 2018	Bad debt expense	$2,750

Table (6)

For 2019:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
September 13, 2019	Accounts receivable	$5,000	December 31, 2019	Bad debt expense	$3,750
			December 31, 2019	Balance (balancing figure)	$1,500

Table (7)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

3.

Expert Solution

To determine

To Calculate: The net realizable value of accounts receivable at the end of 2018 and 2019.

Answer to Problem 5.3BP

Calculate the net realizable value of accounts receivable at the end of 2018 and 2019:

Years	2018	2019
Total accounts receivable	$11,000	$6,000
Less: Allowance for uncollectible accounts	($2,750)	($1,500)
Net realizable value	$8,250	$4,500

Table (8)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Conclusion

Hence, the net realizable value of Engineering M for the year 2018 is $ 8,250 and for the year 2019 is $ 4,500.

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Answer 3

Textbook Question

Chapter 5, Problem 5.3BP

Record transactions related to accounts receivable (LO5–3, 5–5)

The following events occur for Morris Engineering during 2018 and 2019, its first two years of operations.

February 2, 2018 Provide services to customers on account for $38,000.

July 23, 2018 Receive $27,000 from customers on account.

December 31, 2018 Estimate that 25% of uncollected accounts will not be received.

April 12, 2019 Provide services to customers on account for $51,000.

June 28, 2019 Receive $6,000 from customers for services provided in 2018.

September 13, 2019 Write off the remaining amounts owed from services provided in 2018.

October 5, 2019 Receive $45,000 from customers for services provided in 2019.

December 31, 2019 Estimate that 25% of uncollected accounts will not be received.

Required:

1. Record transactions for each date.

2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.

3. Calculate the net realizable value of accounts receivable at the end of 2018 and 2019.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

1.

Expert Solution

To determine

To record: The transactions of engineering M for each date.

Answer to Problem 5.3BP

Date	Account Title and Explanation		Debit ($)	Credit ($)
February 2,2018	Accounts receivable		38,000
		Service revenue		38,000
	( To record the service provided on account)
July 23,2018	Cash		27,000
		Accounts receivable		27,000
	( To record the receipt of cash on account)
December 31, 2018	Bad debt expense (2)		2,750
		Allowance for uncollectible accounts		2,750
	( To record the estimation of future bad debts)
April 12, 2019	Accounts receivable		51,000
		Service Revenue		51,000
	( To record the services provided on account)
June 28, 2019	Cash		6,000
		Accounts receivable		6,000
	( To record receipt of cash on account)
September 13, 2019	Allowance for uncollectible accounts		5,000
		Accounts receivable		5,000
	( To record the writing-off of actual bad debts)
October 5, 2019	Cash		45,000
		Accounts receivable		45,000
	( To record the receipt of cash from customer on account)
December 31, 2019	Bad debt expense (5)		3,750
		Allowance for uncollectible accounts		3,750
	( To record the estimation of future bad debts)

Table (1)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Working notes:

Calculate Estimate future bad debts On December 31, 2018:

$Accounts receivable=[Providing services on account on February 2, 2018−Received cash from customers on account on July 23, 2018]=$38,000−$27,000=$11,000$ (1)

$Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(1)×25%=$2,750$ (2)

Calculate Estimate future bad debts On December 31, 2019:

$Accounts receivable=[Providing services on account on April 12, 2019−Received cash from customers on account on June 28, 2019]=$51,000−$6,000=$45,000$ (3)

$[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2018−Write-off actual bad debts on September 13, 2019]=$2,750−$5,000Debit balance=($2,250)$ (4)

$Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6000(3)×25%+$2,250(4)=$3,750$ (5)

2.

Expert Solution

To determine

To post: Transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

Answer to Problem 5.3BP

For 2018:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
July 23,2018	Accounts receivable	$27,000
December 31, 2018	Balance (Balancing figure)	$27000

Table (2)

For 2019:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
January 1, 2019	Beginning balance	$27,000
June 28, 2019	Accounts receivable	$6,000
October 5, 2019	Accounts receivable	$45,000
December 31, 2019	Balance (balancing figure)	$78,000

Table (3)

For 2018:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
February 2, 2018	Service revenue	$38,000	July 23,2018	Cash	$27000
December 31, 2018	Balance (Balancing figure)	$11,000

Table (4)

For 2019:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
April 12, 2019	Service revenue	$51,000	June 28, 2019	Cash	$6,000
			September 13, 2019	Allowance for uncollectible accounts	$5,000
			October 5, 2019	Cash	45,000
December 31, 2019	Balance (balancing figure)	$6,000

Table (5)

For 2018:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
			December 31, 2018	Bad debt expense	$2,750

Table (6)

For 2019:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
September 13, 2019	Accounts receivable	$5,000	December 31, 2019	Bad debt expense	$3,750
			December 31, 2019	Balance (balancing figure)	$1,500

Table (7)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

3.

Expert Solution

To determine

To Calculate: The net realizable value of accounts receivable at the end of 2018 and 2019.

Answer to Problem 5.3BP

Calculate the net realizable value of accounts receivable at the end of 2018 and 2019:

Years	2018	2019
Total accounts receivable	$11,000	$6,000
Less: Allowance for uncollectible accounts	($2,750)	($1,500)
Net realizable value	$8,250	$4,500

Table (8)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Conclusion

Hence, the net realizable value of Engineering M for the year 2018 is $ 8,250 and for the year 2019 is $ 4,500.

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Answer 4

Textbook Question

Chapter 5, Problem 5.3BP

Record transactions related to accounts receivable (LO5–3, 5–5)

The following events occur for Morris Engineering during 2018 and 2019, its first two years of operations.

February 2, 2018 Provide services to customers on account for $38,000.

July 23, 2018 Receive $27,000 from customers on account.

December 31, 2018 Estimate that 25% of uncollected accounts will not be received.

April 12, 2019 Provide services to customers on account for $51,000.

June 28, 2019 Receive $6,000 from customers for services provided in 2018.

September 13, 2019 Write off the remaining amounts owed from services provided in 2018.

October 5, 2019 Receive $45,000 from customers for services provided in 2019.

December 31, 2019 Estimate that 25% of uncollected accounts will not be received.

Required:

1. Record transactions for each date.

2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.

3. Calculate the net realizable value of accounts receivable at the end of 2018 and 2019.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

1.

Expert Solution

To determine

To record: The transactions of engineering M for each date.

Answer to Problem 5.3BP

Date	Account Title and Explanation		Debit ($)	Credit ($)
February 2,2018	Accounts receivable		38,000
		Service revenue		38,000
	( To record the service provided on account)
July 23,2018	Cash		27,000
		Accounts receivable		27,000
	( To record the receipt of cash on account)
December 31, 2018	Bad debt expense (2)		2,750
		Allowance for uncollectible accounts		2,750
	( To record the estimation of future bad debts)
April 12, 2019	Accounts receivable		51,000
		Service Revenue		51,000
	( To record the services provided on account)
June 28, 2019	Cash		6,000
		Accounts receivable		6,000
	( To record receipt of cash on account)
September 13, 2019	Allowance for uncollectible accounts		5,000
		Accounts receivable		5,000
	( To record the writing-off of actual bad debts)
October 5, 2019	Cash		45,000
		Accounts receivable		45,000
	( To record the receipt of cash from customer on account)
December 31, 2019	Bad debt expense (5)		3,750
		Allowance for uncollectible accounts		3,750
	( To record the estimation of future bad debts)

Table (1)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Working notes:

Calculate Estimate future bad debts On December 31, 2018:

$Accounts receivable=[Providing services on account on February 2, 2018−Received cash from customers on account on July 23, 2018]=$38,000−$27,000=$11,000$ (1)

$Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(1)×25%=$2,750$ (2)

Calculate Estimate future bad debts On December 31, 2019:

$Accounts receivable=[Providing services on account on April 12, 2019−Received cash from customers on account on June 28, 2019]=$51,000−$6,000=$45,000$ (3)

$[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2018−Write-off actual bad debts on September 13, 2019]=$2,750−$5,000Debit balance=($2,250)$ (4)

$Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6000(3)×25%+$2,250(4)=$3,750$ (5)

2.

Expert Solution

To determine

To post: Transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

Answer to Problem 5.3BP

For 2018:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
July 23,2018	Accounts receivable	$27,000
December 31, 2018	Balance (Balancing figure)	$27000

Table (2)

For 2019:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
January 1, 2019	Beginning balance	$27,000
June 28, 2019	Accounts receivable	$6,000
October 5, 2019	Accounts receivable	$45,000
December 31, 2019	Balance (balancing figure)	$78,000

Table (3)

For 2018:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
February 2, 2018	Service revenue	$38,000	July 23,2018	Cash	$27000
December 31, 2018	Balance (Balancing figure)	$11,000

Table (4)

For 2019:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
April 12, 2019	Service revenue	$51,000	June 28, 2019	Cash	$6,000
			September 13, 2019	Allowance for uncollectible accounts	$5,000
			October 5, 2019	Cash	45,000
December 31, 2019	Balance (balancing figure)	$6,000

Table (5)

For 2018:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
			December 31, 2018	Bad debt expense	$2,750

Table (6)

For 2019:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
September 13, 2019	Accounts receivable	$5,000	December 31, 2019	Bad debt expense	$3,750
			December 31, 2019	Balance (balancing figure)	$1,500

Table (7)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

3.

Expert Solution

To determine

To Calculate: The net realizable value of accounts receivable at the end of 2018 and 2019.

Answer to Problem 5.3BP

Calculate the net realizable value of accounts receivable at the end of 2018 and 2019:

Years	2018	2019
Total accounts receivable	$11,000	$6,000
Less: Allowance for uncollectible accounts	($2,750)	($1,500)
Net realizable value	$8,250	$4,500

Table (8)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Conclusion

Hence, the net realizable value of Engineering M for the year 2018 is $ 8,250 and for the year 2019 is $ 4,500.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

1.

Expert Solution

To determine

To record: The transactions of engineering M for each date.

Answer to Problem 5.3BP

Date	Account Title and Explanation		Debit ($)	Credit ($)
February 2,2018	Accounts receivable		38,000
		Service revenue		38,000
	( To record the service provided on account)
July 23,2018	Cash		27,000
		Accounts receivable		27,000
	( To record the receipt of cash on account)
December 31, 2018	Bad debt expense (2)		2,750
		Allowance for uncollectible accounts		2,750
	( To record the estimation of future bad debts)
April 12, 2019	Accounts receivable		51,000
		Service Revenue		51,000
	( To record the services provided on account)
June 28, 2019	Cash		6,000
		Accounts receivable		6,000
	( To record receipt of cash on account)
September 13, 2019	Allowance for uncollectible accounts		5,000
		Accounts receivable		5,000
	( To record the writing-off of actual bad debts)
October 5, 2019	Cash		45,000
		Accounts receivable		45,000
	( To record the receipt of cash from customer on account)
December 31, 2019	Bad debt expense (5)		3,750
		Allowance for uncollectible accounts		3,750
	( To record the estimation of future bad debts)

Table (1)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Working notes:

Calculate Estimate future bad debts On December 31, 2018:

$Accounts receivable=[Providing services on account on February 2, 2018−Received cash from customers on account on July 23, 2018]=$38,000−$27,000=$11,000$ (1)

$Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(1)×25%=$2,750$ (2)

Calculate Estimate future bad debts On December 31, 2019:

$Accounts receivable=[Providing services on account on April 12, 2019−Received cash from customers on account on June 28, 2019]=$51,000−$6,000=$45,000$ (3)

$[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2018−Write-off actual bad debts on September 13, 2019]=$2,750−$5,000Debit balance=($2,250)$ (4)

$Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6000(3)×25%+$2,250(4)=$3,750$ (5)

2.

Expert Solution

To determine

To post: Transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

Answer to Problem 5.3BP

For 2018:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
July 23,2018	Accounts receivable	$27,000
December 31, 2018	Balance (Balancing figure)	$27000

Table (2)

For 2019:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
January 1, 2019	Beginning balance	$27,000
June 28, 2019	Accounts receivable	$6,000
October 5, 2019	Accounts receivable	$45,000
December 31, 2019	Balance (balancing figure)	$78,000

Table (3)

For 2018:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
February 2, 2018	Service revenue	$38,000	July 23,2018	Cash	$27000
December 31, 2018	Balance (Balancing figure)	$11,000

Table (4)

For 2019:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
April 12, 2019	Service revenue	$51,000	June 28, 2019	Cash	$6,000
			September 13, 2019	Allowance for uncollectible accounts	$5,000
			October 5, 2019	Cash	45,000
December 31, 2019	Balance (balancing figure)	$6,000

Table (5)

For 2018:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
			December 31, 2018	Bad debt expense	$2,750

Table (6)

For 2019:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
September 13, 2019	Accounts receivable	$5,000	December 31, 2019	Bad debt expense	$3,750
			December 31, 2019	Balance (balancing figure)	$1,500

Table (7)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

3.

Expert Solution

To determine

To Calculate: The net realizable value of accounts receivable at the end of 2018 and 2019.

Answer to Problem 5.3BP

Calculate the net realizable value of accounts receivable at the end of 2018 and 2019:

Years	2018	2019
Total accounts receivable	$11,000	$6,000
Less: Allowance for uncollectible accounts	($2,750)	($1,500)
Net realizable value	$8,250	$4,500

Table (8)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Conclusion

Hence, the net realizable value of Engineering M for the year 2018 is $ 8,250 and for the year 2019 is $ 4,500.

Answer 8

1.

Expert Solution

To determine

To record: The transactions of engineering M for each date.

Answer to Problem 5.3BP

Date	Account Title and Explanation		Debit ($)	Credit ($)
February 2,2018	Accounts receivable		38,000
		Service revenue		38,000
	( To record the service provided on account)
July 23,2018	Cash		27,000
		Accounts receivable		27,000
	( To record the receipt of cash on account)
December 31, 2018	Bad debt expense (2)		2,750
		Allowance for uncollectible accounts		2,750
	( To record the estimation of future bad debts)
April 12, 2019	Accounts receivable		51,000
		Service Revenue		51,000
	( To record the services provided on account)
June 28, 2019	Cash		6,000
		Accounts receivable		6,000
	( To record receipt of cash on account)
September 13, 2019	Allowance for uncollectible accounts		5,000
		Accounts receivable		5,000
	( To record the writing-off of actual bad debts)
October 5, 2019	Cash		45,000
		Accounts receivable		45,000
	( To record the receipt of cash from customer on account)
December 31, 2019	Bad debt expense (5)		3,750
		Allowance for uncollectible accounts		3,750
	( To record the estimation of future bad debts)

Table (1)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Working notes:

Calculate Estimate future bad debts On December 31, 2018:

$Accounts receivable=[Providing services on account on February 2, 2018−Received cash from customers on account on July 23, 2018]=$38,000−$27,000=$11,000$ (1)

$Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(1)×25%=$2,750$ (2)

Calculate Estimate future bad debts On December 31, 2019:

$Accounts receivable=[Providing services on account on April 12, 2019−Received cash from customers on account on June 28, 2019]=$51,000−$6,000=$45,000$ (3)

$[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2018−Write-off actual bad debts on September 13, 2019]=$2,750−$5,000Debit balance=($2,250)$ (4)

$Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6000(3)×25%+$2,250(4)=$3,750$ (5)

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

To record: The transactions of engineering M for each date.

Answer 13

Answer to Problem 5.3BP

Date	Account Title and Explanation		Debit ($)	Credit ($)
February 2,2018	Accounts receivable		38,000
		Service revenue		38,000
	( To record the service provided on account)
July 23,2018	Cash		27,000
		Accounts receivable		27,000
	( To record the receipt of cash on account)
December 31, 2018	Bad debt expense (2)		2,750
		Allowance for uncollectible accounts		2,750
	( To record the estimation of future bad debts)
April 12, 2019	Accounts receivable		51,000
		Service Revenue		51,000
	( To record the services provided on account)
June 28, 2019	Cash		6,000
		Accounts receivable		6,000
	( To record receipt of cash on account)
September 13, 2019	Allowance for uncollectible accounts		5,000
		Accounts receivable		5,000
	( To record the writing-off of actual bad debts)
October 5, 2019	Cash		45,000
		Accounts receivable		45,000
	( To record the receipt of cash from customer on account)
December 31, 2019	Bad debt expense (5)		3,750
		Allowance for uncollectible accounts		3,750
	( To record the estimation of future bad debts)

Table (1)

Answer 14

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Working notes:

Calculate Estimate future bad debts On December 31, 2018:

$Accounts receivable=[Providing services on account on February 2, 2018−Received cash from customers on account on July 23, 2018]=$38,000−$27,000=$11,000$ (1)

$Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(1)×25%=$2,750$ (2)

Calculate Estimate future bad debts On December 31, 2019:

$Accounts receivable=[Providing services on account on April 12, 2019−Received cash from customers on account on June 28, 2019]=$51,000−$6,000=$45,000$ (3)

$[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2018−Write-off actual bad debts on September 13, 2019]=$2,750−$5,000Debit balance=($2,250)$ (4)

$Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6000(3)×25%+$2,250(4)=$3,750$ (5)

Answer 15

2.

Expert Solution

To determine

To post: Transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

Answer to Problem 5.3BP

For 2018:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
July 23,2018	Accounts receivable	$27,000
December 31, 2018	Balance (Balancing figure)	$27000

Table (2)

For 2019:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
January 1, 2019	Beginning balance	$27,000
June 28, 2019	Accounts receivable	$6,000
October 5, 2019	Accounts receivable	$45,000
December 31, 2019	Balance (balancing figure)	$78,000

Table (3)

For 2018:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
February 2, 2018	Service revenue	$38,000	July 23,2018	Cash	$27000
December 31, 2018	Balance (Balancing figure)	$11,000

Table (4)

For 2019:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
April 12, 2019	Service revenue	$51,000	June 28, 2019	Cash	$6,000
			September 13, 2019	Allowance for uncollectible accounts	$5,000
			October 5, 2019	Cash	45,000
December 31, 2019	Balance (balancing figure)	$6,000

Table (5)

For 2018:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
			December 31, 2018	Bad debt expense	$2,750

Table (6)

For 2019:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
September 13, 2019	Accounts receivable	$5,000	December 31, 2019	Bad debt expense	$3,750
			December 31, 2019	Balance (balancing figure)	$1,500

Table (7)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

To post: Transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

Answer 20

Answer to Problem 5.3BP

For 2018:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
July 23,2018	Accounts receivable	$27,000
December 31, 2018	Balance (Balancing figure)	$27000

Table (2)

For 2019:

Cash account
Date	Particulars	Debit	Date	Particulars	Credit
January 1, 2019	Beginning balance	$27,000
June 28, 2019	Accounts receivable	$6,000
October 5, 2019	Accounts receivable	$45,000
December 31, 2019	Balance (balancing figure)	$78,000

Table (3)

For 2018:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
February 2, 2018	Service revenue	$38,000	July 23,2018	Cash	$27000
December 31, 2018	Balance (Balancing figure)	$11,000

Table (4)

For 2019:

Accounts receivable account
Date	Particulars	Debit	Date	Particulars	Credit
April 12, 2019	Service revenue	$51,000	June 28, 2019	Cash	$6,000
			September 13, 2019	Allowance for uncollectible accounts	$5,000
			October 5, 2019	Cash	45,000
December 31, 2019	Balance (balancing figure)	$6,000

Table (5)

For 2018:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
			December 31, 2018	Bad debt expense	$2,750

Table (6)

For 2019:

Allowance for uncollectible account
Date	Particulars	Debit	Date	Particulars	Credit
September 13, 2019	Accounts receivable	$5,000	December 31, 2019	Bad debt expense	$3,750
			December 31, 2019	Balance (balancing figure)	$1,500

Table (7)

Answer 21

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Answer 22

3.

Expert Solution

To determine

To Calculate: The net realizable value of accounts receivable at the end of 2018 and 2019.

Answer to Problem 5.3BP

Calculate the net realizable value of accounts receivable at the end of 2018 and 2019:

Years	2018	2019
Total accounts receivable	$11,000	$6,000
Less: Allowance for uncollectible accounts	($2,750)	($1,500)
Net realizable value	$8,250	$4,500

Table (8)

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

Conclusion

Hence, the net realizable value of Engineering M for the year 2018 is $ 8,250 and for the year 2019 is $ 4,500.

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

To determine

To Calculate: The net realizable value of accounts receivable at the end of 2018 and 2019.

Answer 27

Answer to Problem 5.3BP

Calculate the net realizable value of accounts receivable at the end of 2018 and 2019:

Years	2018	2019
Total accounts receivable	$11,000	$6,000
Less: Allowance for uncollectible accounts	($2,750)	($1,500)
Net realizable value	$8,250	$4,500

Table (8)

Answer 28

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.