Answer:
The journal entry Pincus recorded to write off uncollectible accounts during 2021:
Debit Allowance for uncollectible accounts $10,700
Credit Accounts receivable $10,700
The entry to recognize bad debt expense for 2021:
Debit Bad Debts Expense $15,440
Credit Allowance for uncollectible account $15,440
The write-offs of allowance for uncollectible accounts during 2021:
Debit Allowance for uncollectible accounts $10,700
Credit Accounts receivable $10,700
Step-by-step explanation:
Pincus Associates uses the allowance method to account for bad debts.
The journal entry Pincus recorded to write off uncollectible accounts during 2021:
Debit Allowance for uncollectible accounts $10,700
Credit Accounts receivable $10,700
The accounts receivable balance at 12/31/2021 = services on account - wrote off uncollectible accounts - cash collections on accounts receivable = $267,000 - $10,700 - $224,700 = $31,600
Estimated uncollectible = 15% x $31,600 = $4,740
Before adjusting, Allowance for uncollectible accounts has balance of Debit $10,700
Bad debt expense = $4,740 + $10,700 = $15,440
The entry:
Debit Bad Debts Expense $15,440
Credit Allowance for uncollectible account $15,440
The write-offs of allowance for uncollectible accounts during 2021:
Debit Allowance for uncollectible accounts $10,700
Credit Accounts receivable $10,700