Question

The following events February 2, 2024 July 23, 2024 December 31, 2024 April 12, 2025 June 28, 2025 September 13, 2025 October 5, 2025 December 31, 2025 occur for Wainwright Engineering during 2024 and 2025, its first two years of operations. Provide services to customers on account for $27,800. Receive $18,500 from customers on account. Estimate that 20% of uncollected accounts will not be received. Provide services to customers on account for $40,800. Receive $6,000 from customers for services provided in 2024. Write off the remaining amounts owed from services provided in 2024. Receive $36,500 from customers for services provided in 2025. Estimate that 20% of uncollected accounts will not be received. Required: 1. Record transactions for each date. 2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts. 3. Calculate net accounts receivable reported in the balance sheet at the end of 2024 and 2025.

Answer 1

Transactions are recorded and posted to the Cash, Accounts Receivable, and Allowance for Uncollectible Accounts. Net Accounts Receivable is calculated by summing Accounts Receivable and subtracting the Allowance for Uncollectible Accounts.

Step-by-step explanation:

Recording Transactions and Posting to Accounts

To accurately account for the company's activities for the years 2024 and 2025, we'll record each of the given events on the appropriate dates and post them to the relevant financial accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts. The goal is to determine the net accounts receivable at the end of each year.

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• February 2, 2024: Provide services on account for $27,800 – Debit Accounts Receivable, Credit Service Revenue.
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• July 23, 2024: Receive $18,500 from customers on account – Debit Cash, Credit Accounts Receivable.
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• December 31, 2024: Estimate 20% of uncollected Accounts Receivable will not be received – Debit Bad Debt Expense, Credit Allowance for Uncollectible Accounts.
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• April 12, 2025: Provide services on account for $40,800 – Debit Accounts Receivable, Credit Service Revenue.
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• June 28, 2025: Receive $6,000 from customers for services provided in 2024 – Debit Cash, Credit Accounts Receivable.
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• September 13, 2025: Write off remaining amounts owed from 2024 – Debit Allowance for Uncollectible Accounts, Credit Accounts Receivable.
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• October 5, 2025: Receive $36,500 from customers for services provided in 2025 – Debit Cash, Credit Accounts Receivable.
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• December 31, 2025: Estimate 20% of uncollected Accounts Receivable will not be received – Debit Bad Debt Expense, Credit Allowance for Uncollectible Accounts.

To calculate the net accounts receivable for the balance sheet:

1. 
   
3. Sum up all Accounts Receivable entries.
4. 
   
6. Subtract the total in the Allowance for Uncollectible Accounts at year-end.

Net Accounts Receivable equals Accounts Receivable minus the Allowance for Uncollectible Accounts. By following these steps, we can ensure accurate accounting records for Wainwright Engineering.