Drew Incorporated provides legal services. During 2021, the company provides services of $500,000 on account. Of this

Question

Drew Incorporated provides legal services. During 2021, the company provides services of $500,000 on account. Of this amount, $70,000 remains uncollected at the end of the year. An aging schedule as of December 31, 2021, is provided below. Age Group Amount Receivable Estimated Percent Uncollectible Not yet due $40,000 5% 0-30 days past due 19,000 10% 31-60 days past due 9,000 20% More than 60 days past due 6,000 40% Total $74,000 Required: Calculate the allowance for uncollectible accounts. Record the December 31, 2021 adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $500 (debit).

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1) Computation of Allowance for Uncollectible Accounts: Amount Estimated Estimated Receivable Percent Bad Age Group Uncollectible Debts Not yet due 40,000 5% 2000 0-30 days past due 19,000 10% 1900 31-60 days past due 9,000 20% 1800 More than 60 days past due 6,000 40% 2400 Total 74,000 8100 2) Journal Entry: Date General Journal Debit Credit December 31, 2012 Bad Debt Expenses 8600 Allowance for Uncollectible Accounts 8,600 (8100+500)

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Drew Incorporated provides legal services

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1) Computation of Allowance for Uncollectible Accounts:
		Amount	Estimated	Estimated
		Receivable	Percent	Bad
Age Group			Uncollectible	Debts

Not yet due		40,000	5%	2000
0-30 days past due		19,000	10%	1900
31-60 days past due		9,000	20%	1800
More than 60 days past due		6,000	40%	2400
Total		74,000		8100

2) Journal Entry:
Date	General Journal			Debit	Credit

December 31, 2012	Bad Debt Expenses			8600
	Allowance for Uncollectible Accounts				8,600
	(8100+500)