Answer:
The following journal entries are provided
Explanation:
June 12, 2021
Rendered services to clients on account for $41,000.
DEBIT CREDIT
Receivable account $41,000
Services Revenue $41,000
September 17, 2021
Collected $25,000 from clients on account.
DEBIT CREDIT
Cash $25,000
Receivable $25,000
December 31, 2021
Estimate that 45% of accounts receivable by year-end will default.
DEBIT CREDIT
Bad debt($16,000x45%) $7,200
Allowance for doubtful debt $7,200
March 4, 2022
Rendered services to clients on account for $56,000
DEBIT CREDIT
Receivable account $56,000
Services Revenue $56,000
May 20, 2022
Received $10,000 from clients for services rendered in 2021.
DEBIT CREDIT
Cash $10,000
Receivable $10,000
July 2, 2022
Wrote off the outstanding amounts from services provided in 2021.
Calculation: $41,000 - $25,000 - $10,000 = $6,000
DEBIT CREDIT
Allowance for doubtful debt $6,000
Account Receivable $6,000
October 19, 2022
Received $45,000 from clients for services provided in 2022.
DEBIT CREDIT
Cash $45,000
Receivable $45,000
December 31, 2022
Estimate that 45% of accounts receivable at year-end will not be collected.
DEBIT CREDIT
Bad debt (w) $3,750
Allowance for bad debt $3,750
Calculation:
($56,000 - $45,000) x45% = $4,950
Balance in Allowance account at December 31, 2021 = 7,200
Bad debt disposed of = 6,000
Remaining balance = 1,200
Thus, the Allowance for doubtful debt at December 31, 2022 = $4,950 - $1,200
Allowance for doubtful debt at December 31, 2022 = $3,750
