(L.OBJ. 3, 5) Accounting for uncollectible accounts using the allowance method and repor...

(L.OBJ. 3, 5) Accounting for uncollectible accounts using the allowance method and reporting receivables on the balance sheet [15—20 min]

At September 30, 2011, Eagle Mountain Flagpoles had Accounts receivable of $33,000 and Allowance for uncollectible accounts had a credit balance of $4000. During October 2011, Eagle Mountain Flagpoles recorded the following:

Requirements

1. Journalize sales, collections, uncollectible-account expense using the allowance method (percent-of-sales method), and write-offs of uncollectibles during October 2011.

2. Prepare T-accounts to show the ending balances in Accounts receivable Allowance for uncollectible accounts. Compute net accounts receivable at October 31. How much does Eagle Mountain expect to collect?

3. Show how Eagle Mountain Flagpoles will report Accounts receivable on October 31, 2011, balance sheet.