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11. Caruthers Company uses the allowance method to account for bad debts. At the beginning of 2018, the Allowance for Uncolle
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Solution for Problem 11:

Calculation of Allowance for Uncollectible account balance for the year end 2018:

Particulars Amount
Allowance for Uncollectible account receivables balance at the beginning of 2018 13800
Less: Receivables Written off as Uncollectible during the year 2018 -18700
Add: Allowance for Uncollectible account receivables provided for the Current year (2% of Credit Sales)i.e 0.02* $790,000 15800
Allowance for Uncollectible account balance at the end of 2018 10900

Ledger A/c will be as follows for above:

Allowance for Uncollectible account receivables a/c ( Ledger)
Dr                                                                                                                                                                                                                                                  Cr
Date Particulars Amount Date Particulars Amount
31st Dec 2018 To Write off of Uncollectibles 18700 1st January 2018 By Balance b/d (Opening Balance) 13800
31st Dec 2018 By Profit /loss a/c ( Income Statement) 15800
31st Dec 2018 By Balance ( Carried forward to next year) 10900
29600

29600

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