Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet    At September 30, 2018, the accounts of Roxbury Medical Center (RMC) include the following:  Accounts Receivable  $154,000  Allowance for Bad Debts (credit balance)  3,700  During the last quarter of 2018, RMC completed the following selected transactions:  Sales on account, $465,000. Ignore Cost of Goods Sold.  Collections on account, $441,800.  Wrote off accounts receivable as uncollectible: Jenkins, Co., $1,900; Sony, $800; and Smith, Inc., $500  Recorded bad debts expense based on the aging of accounts receivable, as follows:      Age of Accounts    1–30 Days  31–60 Days  61–90 Days  Over 90 Days  Accounts Receivable  $ 97,000  $ 37,000  $ 17,000  $ 14,000  Estimated percent uncollectible  0.2%  3.5%  29%  32%    Page Break  Requirements  1.Open T-accounts for Accounts Receivable and Allowance for Bad Debts. Journalize the transactions (omit explanations) and post to the two accounts.  2.Show how Roxbury Medical Center should report net accounts receivable on its December 31, 2018, balance sheet.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

1)  Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet 

 

At September 30, 2018, the accounts of Roxbury Medical Center (RMC) include the following: 

Accounts Receivable 

$154,000 

Allowance for Bad Debts (credit balance) 

3,700 

During the last quarter of 2018, RMC completed the following selected transactions: 

  • Sales on account, $465,000. Ignore Cost of Goods Sold. 
  • Collections on account, $441,800. 
  • Wrote off accounts receivable as uncollectible: Jenkins, Co., $1,900; Sony, $800; and Smith, Inc., $500 
  • Recorded bad debts expense based on the aging of accounts receivable, as follows: 

 

 

Age of Accounts 

 

1–30 Days 

31–60 Days 

61–90 Days 

Over 90 Days 

Accounts Receivable 

$ 97,000 

$ 37,000 

$ 17,000 

$ 14,000 

Estimated percent uncollectible 

0.2% 

3.5% 

29% 

32% 

 

Page Break 

Requirements 

1.Open T-accounts for Accounts Receivable and Allowance for Bad Debts. Journalize the transactions (omit explanations) and post to the two accounts. 

2.Show how Roxbury Medical Center should report net accounts receivable on its December 31, 2018, balance sheet. 

 

SOLUTION 

Requirement 1 

Date 

Accounts and Explanation 

Debit 

Credit 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Age of Accounts Receivable 

 

1 – 30 Days 

31 – 60 Days 

61 – 90 Days 

Over 90 Days 

Total Receivables 

Accounts Receivable 

$97,000 

$37,000 

$17,000 

$14,000 

$ 165,000 

Percent uncollectible 

× 0.2% 

× 3.5% 

× 29.0% 

× 32.0% 

 

Estimated total uncollectible 

 

 

 

 

 

 

 (target balance) 

Requirement 2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Requirement 3 

 

ROXBURY MEDICAL CENTER 

Balance Sheet−Partial 

December 31, 2018 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 6 images

Blurred answer
Knowledge Booster
Receivables Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education