Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $156,000 of services on account. In 2021, the company wrote off uncollectible accounts of $6,300. By the end of 2021, cash collections on accounts receivable totaled $132,300. Pincus estimates that 10% of the accounts receivable balance at 12/31/2021 will prove uncollectible. Required:
1. & 2. What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet
Record the write-offs of allowance for uncollectible accounts during 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
1
record to recognize bad debt expense for 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
2

the answer is given below

Explanation:

It should be noted that the account receivable ending balance was calculated as:

Credit sales = 156,000

Less: collection of account= 132,300

Less: written off = 6,300

= 17,400

The bad debt expense was calculated as:

= (17,400 × 10%) + 6300

= (17400 × 0.1) + 6300

= 1740 + 6300

= 8040

Other explanation have been attached.

(A) Liability Coverage

Explanation:

After reading the question, I have no doubt it was Stephen fault for the collision. So, even if the question doesn't say, you can conclude he will be found "at-fault" which means he will have to pay for fixing Keisha's car. In this case, he will have to pay for replacing Keisha's bumper. If he has a liability coverage, the insurance will pay for this, because the liability coverage means that any liability (crash, coallision or whatever) that is your fault and caused damage to others (like in their cars or other property or if they suffer body injuries) will be paid by the insurance.