Net accounts receivable is calculated by subtracting allowance for uncollectible from gross accounts receivable.
1- The journal entries are used to record the business transactions.
2- Ledger accounts are used to summarize thee recorded transactions.
3- Net accounts receivable (2024) = 8,640
Net accounts receivable (2025) = 4,280
1. The Turner Corporation's transactions are recorded as follows:
Date Account Title Debit Credit Journal Entries
Accounts Receivable $35,000 on June 12, 2024
$35,000 in revenue from services
Cash $20,000, September 17, 2024
$20,000 in accounts receivable
Bad Debt Cost $5,760 as of December 31, 2024
Uncollectible Allowance: $5,760
Accounts Receivable $46,400 on March 4, 2025
$46,400 in revenue from services
Cash $10,000, May 20, 2025
$10,000 in Accounts Receivable
Allowance for Uncollectible $4,400 on July 2, 2025
$4,400 in Accounts Receivable
On October 19, 2025, the cash value is $40,000.
$40,000 in accounts receivable
Bad Debts Cost $2,400 on December 31, 2025
Uncollectible Allowance: $2,400
2. The following is the procedure for posting transactions to the chosen accounts:
Account Titles Debit Credit Cash Account Date Account Titles Debit Credit
Accounts Receivable $17,000 on September 17, 2024
Accounts Receivable $10,000 on May 20, 2025
The date is October 19, 2025 $37,000 in accounts receivable
Date Account Titles Debit Credit Accounts Receivable
Service Revenue of $31,400 on June 12, 2024
17th of September, 2024, $17,000 cash
$46,400 in service revenue on March 4, 2025
$10,000 cash, May 20, 2025
Allowance for Uncollectible Accounts $4,400 on July 2, 2025
On October 19, 2025, a cash payment of $37,000 is made.
Balance $9,400 on December 31, 202 $77,800
Provision for Uncollectible Accounts
Debit Credit Date Account Titles
Bad debt expense of $5,760 as of December 31, 2024
Accounts Receivable $4,400 on July 2, 2025
Bad Debts Cost $2,400 as of December 31, 2025
Balance of $3,760 at the end of December 2025
3. The balance sheet net accounts receivable at the end of 2024 and 2025 include:
Net accounts receivable = $8,640 in 2024
Net accounts receivable = $5,640 in 2025.
Transaction Analysis: Accounts Receivable $31,400 on June 12, 2024 $31,400 in service revenue September 17, 2024, $17,000 Cash Accounts Receivable $17,000
Bad Debt Cost $5,760 as of December 31, 2024 Provision for Uncollectible Accounts $5,760 ($31,400 minus $17,000 multiplied by 40%)
Accounts Receivable $50,000 on March 4, 2025 $50,000 in service revenue
May 20, 2025, $10,000 Cash Accounts $10,000 is available for receipt.
Allowance for Uncollectible Accounts $4,400 Accounts Receivable $4,400 July 2, 2025
The date is October 19, 2025. $37,000 in cash and accounts Receivable: $37,000
Bad Debts Cost $2,400 on December 31, 2025 Uncollectible Accounts Allowance $2,400
Net Accounts Receivable: $8,640 in 2024 ($14,400 - $5,760)
2025: $5,640 ($9,400 - $3,760).