Gulig and Durham, a law firm, started 2014 with accounts receivable of $60,000 and an allowance for uncollectible accounts of $5,000. The 2014 service revenue on account was $400,000, and cash collections on account totalled $410,000. During 2014, Gulig and Durham wrote off uncollectible accounts receivable of $7,000. At December 31, 2014, the aging-of-receivables method indicated that Gulig and Durham will not collect $10,000 of its accounts receivable.
Journalize Gulig and Durham's (a) service revenue, (b) cash collections on account, (c) write-offs of uncollectible receivables, and (d) bad debt expense for the year. Explanations are not required. Prepare a T-account for Allowance for Uncollectible Accounts to show your computation of bad debt expense for the year.