Gray and Dumham, a law firm, started 2010 with accounts receivable of $31,000 and an allowance for uncollectible accounts of $4,000. The 2010 service revenues on account totaled $175,000 and cash collections on account totaled $128,000.
During 2010, Gray and Dumham wrote off uncollectible accounts receivable of $2,800. At December 31, 2010, the aging of accounts receivable indicated that Gray and Dumham will not collect $1,850 of its accounts receivable.
Journalize Gray and Dumham’s
(a) Service revenue
(b) Cash collections on account
(c) Write-offs of uncollectible receivables
(d) Uncollectible-account expense for the year.
Explanations are not required. Prepare a T-account for Allowance for Uncollectible Accounts to show your computation of uncollectible-account expense for the year.