Ask Question
4 May, 17:32

Required information [The following information applies to the questions displayed below.] The following events occur for Morris Engineering during 2021 and 2022, its first two years of operations. February 2, 2021 Provide services to customers on account for $26,000. July 23, 2021 Receive $17,000 from customers on account. December 31, 2021 Estimate that 20% of uncollected accounts will not be received. April 12, 2022 Provide services to customers on account for $39,000. June 28, 2022 Receive $6,000 from customers for services provided in 2021. September 13, 2022 Write off the remaining amounts owed from services provided in 2021. October 5, 2022 Receive $35,000 from customers for services provided in 2022. December 31, 2022 Estimate that 20% of uncollected accounts will not be received. Required: 1. Record transactions for each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

+2
Answers (1)
  1. 4 May, 17:41
    0
    Journal 1 : February 2, 2021 Provide services to customers on account for $26,000

    Trade Receivables $26,000 (debit)

    Revenue $26,000 (credit)

    Journal 2 : July 23, 2021 Receive $17,000 from customers on account.

    Bank $17,000 (debit)

    Trade Receivables $17,000 (credit)

    Journal 3 : December 31, 2021 Estimate that 20% of uncollected accounts will not be received

    Profit and Loss $ 1,800 (debit)

    Allowance for Doubtful Debts $ 1,800 (credit)

    (26,000-17,000) * 20%

    Journal 4 : April 12, 2022 Provide services to customers on account for $39,000

    Trade Receivables $39,000 (debit)

    Revenue $39,000 (credit)

    Journal 5 : June 28, 2022 Receive $6,000 from customers for services provided in 2021.

    Bank $6,000 (debit)

    Trade Receivables $6,000 (credit)

    Journal 6 : September 13, 2022 Write off the remaining amounts owed from services provided in 2021.

    Bad Debts $3,000 (debit)

    Trade Receivables $3,000 (credit)

    (26,000-17,000-6,000)

    Journal 7 : October 5, 2022 Receive $35,000 from customers for services provided in 2022

    Bank $35,000 (debit)

    Trade Receivables $35,000 (credit)

    Journal 8 : December 31, 2022 Estimate that 20% of uncollected accounts will not be received.

    Profit and Loss $800 (debit)

    Allowance for Doubtful Debts $800 (credit)

    39,000-35,000*20% = 800

    Explanation:

    "Services to customers on account"

    Recognise an Asset - Trade Receivables and also Recognise Revenue

    "Receipt of Cash from Receivables"

    Recognise the Assets of Cash and De-recognise the Trade Receivable

    "Estimate of uncollected accounts"

    Recognise an Expense in the Profit and Loss and recognise a Contra - Account Allowance for Doubtful Debts to De-recognise the Trade Receivables
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Required information [The following information applies to the questions displayed below.] The following events occur for Morris ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers