Accounting for Assets: Receivables Slow Running Shoes uses the Aging of receivables method to account for uncollectible accounts. LET'S DISCUSS o The balance in the Allowance for uncollectible account as at Jan 1", 2010 was $10,500 (credit) o The balance in the Accounts Receivable account as at Jan 1", 2010 was $133,000. The company completed the following transactions during 2010 and 2011: 2010 June 10 Wrote off the balance of $600 from Manny Miller's account as uncollectible Resinstated the account of Betty Lou and
Accounting for Assets: Receivables Slow Running Shoes uses the Aging of receivables method to account for uncollectible accounts. LET'S DISCUSS o The balance in the Allowance for uncollectible account as at Jan 1", 2010 was $10,500 (credit) o The balance in the Accounts Receivable account as at Jan 1", 2010 was $133,000. The company completed the following transactions during 2010 and 2011: 2010 June 10 Wrote off the balance of $600 from Manny Miller's account as uncollectible Resinstated the account of Betty Lou and
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 11EA: Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables....
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Question
![LET'S
DISCUSS
Accounting for Assets: Receivables
Slow Running Shoes uses the Aging of
receivables method to account for
uncollectible accounts.
o The balance in the Allowance for uncollectible
account as at Jan 1“, 2010 was $10,500 (credit)
o The balance in the Accounts Receivable account as at
Jan 1", 2010 was $133,00o.
The company completed the following transactions during
2010 and 2011:
2010
June 10th
Wrote off the balance of $600 from Manny
Miller's account as uncollectible
Re-instated the account of Betty Lou and
September 15t" recorded the collection of $1200 as
payment in full for her account which had
been written off earlier
December 31st Recorded the uncollectible account expense
based on the aging schedule. The schedule
showed that $14,100 of accounts receivable
was estimated as uncollectible
December 31st Made the closing entry for the uncollectible
expense account
2011
Sold inventory to Jack Frost, $1100, on
Jan 17
асcount
Wrote off as uncollectible the accounts of
Barry Semper, $1,500; Maria Jesus $1,400
and Rory Paul $200
Received 40% of the amount owed by Jack
August 15
September 26 Frost and wrote off the remainder as
uncollectible
Received 20% of the funds owed from
October 16
Maria Jesus as part payment of her account
which had been written off earlier as
uncollectible
The Aging schedule showed an estimated
December 31 $7500 as uncollectible
Required:
1. Prepare journal entries for each transaction (No
narrations required)
2. Prepare the Allowance for Uncollectible and the
Accounts Receivable accounts based on the information
presented and balance off each account.
3. Prepare the balance sheet extracts as at Dec 31 2010 &
2011 to show the net realizable value for the Accounts
Receivable.
4. Assume that the percentage of sales method was used
instead by the company and that on December 31“, 2010
5% of 2010 's credit sales are estimated to be
uncollectible. Assume Sales for 2010 were 520,000
(60% relates to cash sales)
You are now required to:
a. Determine the amount to be charged to the
uncollectible expense account.
b. (1) Prepare the Allowance for uncollectible account
for 2010, using this method
(ii) Prepare the balance sheet extract to show the
net realizable value of the Accounts Receivable as at
December 31 2010](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F93f0062c-37da-4975-bd5c-ddf61a91c677%2F34f933a6-506c-4ff7-85fe-9cc0d8d2395f%2Fxpnq9t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:LET'S
DISCUSS
Accounting for Assets: Receivables
Slow Running Shoes uses the Aging of
receivables method to account for
uncollectible accounts.
o The balance in the Allowance for uncollectible
account as at Jan 1“, 2010 was $10,500 (credit)
o The balance in the Accounts Receivable account as at
Jan 1", 2010 was $133,00o.
The company completed the following transactions during
2010 and 2011:
2010
June 10th
Wrote off the balance of $600 from Manny
Miller's account as uncollectible
Re-instated the account of Betty Lou and
September 15t" recorded the collection of $1200 as
payment in full for her account which had
been written off earlier
December 31st Recorded the uncollectible account expense
based on the aging schedule. The schedule
showed that $14,100 of accounts receivable
was estimated as uncollectible
December 31st Made the closing entry for the uncollectible
expense account
2011
Sold inventory to Jack Frost, $1100, on
Jan 17
асcount
Wrote off as uncollectible the accounts of
Barry Semper, $1,500; Maria Jesus $1,400
and Rory Paul $200
Received 40% of the amount owed by Jack
August 15
September 26 Frost and wrote off the remainder as
uncollectible
Received 20% of the funds owed from
October 16
Maria Jesus as part payment of her account
which had been written off earlier as
uncollectible
The Aging schedule showed an estimated
December 31 $7500 as uncollectible
Required:
1. Prepare journal entries for each transaction (No
narrations required)
2. Prepare the Allowance for Uncollectible and the
Accounts Receivable accounts based on the information
presented and balance off each account.
3. Prepare the balance sheet extracts as at Dec 31 2010 &
2011 to show the net realizable value for the Accounts
Receivable.
4. Assume that the percentage of sales method was used
instead by the company and that on December 31“, 2010
5% of 2010 's credit sales are estimated to be
uncollectible. Assume Sales for 2010 were 520,000
(60% relates to cash sales)
You are now required to:
a. Determine the amount to be charged to the
uncollectible expense account.
b. (1) Prepare the Allowance for uncollectible account
for 2010, using this method
(ii) Prepare the balance sheet extract to show the
net realizable value of the Accounts Receivable as at
December 31 2010
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