Question

A More Info • Sales on account, $420,000. Ignore Cost of Goods Sold. • Collections on account, $374,100 • Wrote off accounts receivable as uncollectible: Roho Co., $1,800; Owen Wilson, $900; and Paradise, Inc., $500. • Recorded bad debts expense based on the aging of accounts receivable, as follows: Age of Accounts Accounts Receivable Estimated percent uncollectible 1-30 Days 31-60 Days 61–90 Days Over 90 Days $ 95,000 $ 43,000 $ 16,000 $ 32,700 0.2% 2% 20% 25% A Requirements - x 1. Open T-accounts for Accounts Receivable and Allowance for Bad Debts. Journalize the transactions (omit explanations) and post to the two accounts. Show how West Terrace Medical Center should report net accounts receivable on its December 31, 2018, balance sheet. Print Print [Done Done

Answer 1

Credit Date 2018 Account and explanation Accounts receivable Sales revenue Debit 420,000 420,000 374,100 Cash Accounts receviable 374,100 3,200 1,800 Allowancce for bad debts Accounts receviable-Roho Co Accounts receviable-Owen Wilson Accounts receviable-Paradise Inc. 9001 500 11,725 Bad debt expense Allowancce for bad debts 11,725

Accounts receivable Beg. Bal. 144,000 Cash collection Sales revenue 420,000 Write off End. Bal. 186,700 374,100 3,200 Write off 3,900 Allowance for bad debts 3,200 Beg. Bal. Bad debt expense (Balancing figure) End. Bal. 11,725 12,425

Balance sheet (Partial): Other assets: Accounts receivable Less: Allowance for bad debts 186,700 -12,425 174,275

Working note:

Age of accounts 1-30 days 31-60 days 61-90 days Over 90 days 95,000 43,000 16,000 32,700 0.20% 2% 20% 25% 190 860 3200 8175 Total 186,700 Accounts receivable Estimated percent uncollectible Estimated amount uncollectible 12,425