Questions -
1. At the end of the year, a company has a balance in Allowance for Uncollectible Accounts of $230 (credit) before any year-end adjustment. The balance of Accounts Receivable is $16,000. The company estimates that 14% of accounts receivable will not be collected over the next year.
Record the adjustment for uncollectible accounts.
2. During 2012, its first year of operations, a company provides services on account of $260,000. By the end of 2012, cash collections on these accounts total $139,000. The company estimates that 11% of accounts receivable will be uncollectible.
Record the adjustment for uncollectible accounts on December 31, 2012.
Use these words only: Interest Revenue, Accounts Payable, Notes Payable, Cash, Accounts Receivable, Bad Debt Expense, Allowance for uncollectible accounts, Interest expense.