Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $126,000 of services on account. In 2021, the company wrote off uncollectible accounts of $5,100. By the end of 2021, cash collections on accounts receivable totaled $107,100. Pincus estimates that 10% of the accounts receivable balance at 12/31/2021 will prove uncollectible.

What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021?

Journal entries

Explanation:

The journal entries are shown below:

1. Allowance for doubtful accounts Dr$5,100

          To Accounts Receivable  $5,100

(Being the written off uncollected amount is recorded)

2. Bad debts expense  $18,900

      Allowance for Doubtful Accounts   $18,900

(Being the bad debt expense is recorded)

The computation of is shown below:

= Ending balance of account receivable × estimated percentage

where,

Ending balance is

= Services on Account - Amount Written Off - Collection of accounts receivables

= $126,000 - $5,100 - $107,100

= $13,800

Now the bad debt expense is

= $13,800 + $5,100

= $18,900

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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