Fraud Investigators Inc. operates a fraud detection service. a. On March 31, 10 customers were billed for detection services totaling $34,000.
b. On October 31, a customer balance of $1,950 from a prior year was determined to be uncollectible and was written off.
c. On December 15, a customer paid an old balance of $810, which had been written off in a prior year.
d. On December 31, $590 of bad debts were estimated and recorded for the year.
Required:
1. Prepare journal entries for each transaction above.
a) Record the service revenue of $34,000 billed on account.
b) Record the write-off of a certain customer account from a prior year which is not collectible totaling $1,950.
2. Complete the following table, indicating the amount and effect (+ for increase, − for decrease, and NE for no effect) of each transaction. Ignore income taxes.
Transaction Net Receivable Net Sales Income From Operation
A
B
C
D