{"id":43313,"date":"2025-06-29T18:00:36","date_gmt":"2025-06-29T18:00:36","guid":{"rendered":"https:\/\/gaviki.com\/blog\/?p=43313"},"modified":"2025-06-29T18:00:38","modified_gmt":"2025-06-29T18:00:38","slug":"3-during-2024-its-first-year-of-operations-riley-construction-provides-services-on-account-of104000","status":"publish","type":"post","link":"https:\/\/gaviki.com\/blog\/3-during-2024-its-first-year-of-operations-riley-construction-provides-services-on-account-of104000\/","title":{"rendered":"3 During 2024, its first year of operations, Riley Construction provides services on account of104,000."},"content":{"rendered":"\n
3 During 2024, its first year of operations, Riley Construction provides services on account of 104,000. Riley estimates that 25% of the uncollected accounts will be uncollectible. In 2025, the company writes off uncollectible accounts of 14,850. Record the write-off of accounts receivable in 2025. 3-b. Calculate the balance of Allowance for Uncollectible Accounts at the end of 2025 (before adjustment in 2025). Complete this question by entering your answers in the tabs below. Required 1 Required 2a Required 2b Required 3a Required 3b Record the adjusting entry for uncollectible accounts on December 31, 2024. (If no entry is required for a particular transaction\/event, select “No Journal Entry Required” in the first account field.) View transaction list Check my work<\/p>\n\n\n\n
The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n
To record the required transactions for Riley Construction\u2019s uncollectible accounts, we will go through each step systematically, ensuring all calculations and journal entries are clear.<\/p>\n\n\n\n
1. Adjusting Entry for Uncollectible Accounts (2024)<\/strong><\/h3>\n\n\n\n
In 2024, Riley Construction estimates that 25% of the uncollected accounts will be uncollectible. The total accounts receivable for 2024 is 104,000<\/strong>. Therefore, the estimated uncollectible amount is: 104,000\u00d725%=26,000104,000 \\times 25\\% = 26,000104,000\u00d725%=26,000<\/p>\n\n\n\n
This is the estimated balance for the Allowance for Uncollectible Accounts<\/strong> at the end of 2024. Riley would make an adjusting journal entry on December 31, 2024, to account for this estimate.<\/p>\n\n\n\n
Adjusting Entry:<\/h4>\n\n\n\n
\n
Debit:<\/strong> Bad Debt Expense $26,000<\/li>\n\n\n\n
Credit:<\/strong> Allowance for Uncollectible Accounts $26,000<\/li>\n<\/ul>\n\n\n\n
2. Write-off of Accounts Receivable in 2025<\/strong><\/h3>\n\n\n\n
In 2025, Riley writes off $14,850<\/strong> in uncollectible accounts. To record the write-off, Riley needs to remove the amounts from both Accounts Receivable<\/strong> and the Allowance for Uncollectible Accounts<\/strong>.<\/p>\n\n\n\n
Write-off Journal Entry:<\/h4>\n\n\n\n
\n
Debit:<\/strong> Allowance for Uncollectible Accounts $14,850<\/li>\n\n\n\n
This entry reduces both the Accounts Receivable<\/strong> balance and the Allowance for Uncollectible Accounts<\/strong> by the amount written off.<\/p>\n\n\n\n
3. Balance of Allowance for Uncollectible Accounts at the End of 2025 (Before Adjustment)<\/strong><\/h3>\n\n\n\n
After the write-off of $14,850<\/strong>, the balance in the Allowance for Uncollectible Accounts<\/strong> at the end of 2025 (before any further adjustments) can be calculated by subtracting the write-off from the Allowance for Uncollectible Accounts<\/strong> at the end of 2024.<\/p>\n\n\n\n
\n
Initial balance in Allowance for Uncollectible Accounts (12\/31\/2024): $26,000<\/strong><\/li>\n\n\n\n
Less: Write-off in 2025: $14,850<\/strong><\/li>\n<\/ul>\n\n\n\n
Balance of Allowance for Uncollectible Accounts (12\/31\/2025 before adjustment):<\/strong> $11,150<\/strong><\/li>\n<\/ol>\n\n\n\n
These entries reflect Riley Construction\u2019s method of estimating and managing its uncollectible accounts. The final balance will change after any further adjustments or new estimates for 2025.<\/p>\n\n\n\n<\/figure>\n","protected":false},"excerpt":{"rendered":"
3 During 2024, its first year of operations, Riley Construction provides services on account of104,000. Riley estimates that 25% of the uncollected accounts will be uncollectible. In 2025, the company writes off uncollectible accounts of14,850. Record the write-off of accounts receivable in 2025. 3-b. Calculate the balance of Allowance for Uncollectible Accounts at the end […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-43313","post","type-post","status-publish","format-standard","hentry","category-quiz-questions"],"_links":{"self":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/43313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/comments?post=43313"}],"version-history":[{"count":1,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/43313\/revisions"}],"predecessor-version":[{"id":43315,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/43313\/revisions\/43315"}],"wp:attachment":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/media?parent=43313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/categories?post=43313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/tags?post=43313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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