The Following Information Is Available for Plains Company,which Uses the Allowance

question 64

Essay

The following information is available for Plains Company,which uses the allowance method of accounting for uncollectible accounts.
Plains estimated that 1% of sales on account will be uncollectible.After several attempts at collection,Plains wrote off an account of $900 that could not be collected.
Required: Prepare journal entries for the following events:
a)2016 service revenue
b)2016 collections on account
c)Write-off of the uncollectible account
d)Uncollectible accounts expense for 2016

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Definitions:

Capacity

The maximum level of output that a company can sustain to make a product or provide a service.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, assuming all resources are fully and efficiently utilized.

Unemployment Rate

The slice of the labor pool actively seeking employment but currently unemployed.

Full Production

The state where all available resources are being used efficiently to produce goods and services.