Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of

Question:

Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $250,000 of services on account. In 2021, the company wrote off uncollectible accounts of $10,000. By the end of 2021, cash collections on accounts receivable totaled $210,000. Pincus estimates that 20% of the accounts receivable balance at 12/31/2021 will prove uncollectible.

Required:
1. What journal entry did Pincus record to write off uncollectible accounts during 2021?
2. What journal entry should Pincus record to recognize bad debt expense for 2021?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

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