Problem
Canary Limited reported an Accounts Receivable balance of $582,000 as at 1 January 2020. Allowance for Uncollectible Accounts had a credit balance of $38,000 as at 1 January 2020. For the year 2020, the company earned service revenue on account for a total of $742,000 and reported cash collections on account totaled $900,000. In addition, the company wrote off uncollectible accounts receivable of $20,000.
The year-end of Canary Limited is 31 December. The required credit balance in Allowance for Uncollectible Accounts as at 31 December 2020 was estimated to be $32,000.
Task
(1) (a) Calculate the balance of accounts receivable as at 31 December 2020.
(b) Calculate the amount of uncollectible-account expense for the year ended 31 December 2020.
(2) Prepare journal entries to:
(a) write-off the uncollectible accounts receivable.
(b) record the uncollectible-account expense for the year ended 31 December 2020.