Question

The following events occur for Morris Engineering during 2018 and 2019, its first two years of operations. Journalize... February 2, 2018 Provide services to customers on account for $38,000. July 23, 2018 Receive $27,000 from customers on account. December 31, 2018 Estimate that 25% of uncollected accounts will not be received. 1. 2.

Answer 1

Journal Entries :
Date	Accounts Titles	Debit $	Credit $
2/2/2018	AR	38000
	Service revenue		38000
7/23/2018	Cash	27000
	AR		27000
12/31/2018	Bad Debts	2750
	Allowance for Doubtful accounts		2750
	(11000*25%)
4/12/2019	AR	51000
	Service Revenue		51000
6/28/2019	Cash	6000
	AR		6000
6/28/2019	Allowance for Doubtful accounts	2750
	Bad Debts	2250
	AR		5000
10/5/2019	Cash	45000
	AR		45000
12/31/2019	Bad Debts	1500
	Allowance for Doubtful accounts		1500
	(6000*25%)

T - Accounts :

DEBIT	AMOUNT$	CREDIT	AMOUNTS
Cash A/c :
7/23/2018	27000
6/28/2018	6000	12/31/2018	33000
1/1/2019	33000
10/5/2019	45000	12/31/2019	78000
AR A/c :
2/2/2018	38000	7/23/2018	27000
4/12/2019	51000	6/28/2019	6000
		6/28/2019	2750
		6/28/2019	2250
		10/5/2019	45000
		C/B	6000
Allowance for Doubtful accounts
6/28/2019	2750	12/31/2018	2750
C/B	1500	12/31/2019	1500

Net Realisable Value :

Accounts receivable - Net Realisable Value	2018	2019
Total Accounts Receivable	$11000	$6000
Less: Allowance for Uncollectible Accounts	2750	1500
Net Realisable value	$8250	$4500