At the beginning of 2009, Pental Company had the following balances:   A/R = $122,000   Allowance for Uncollectible Accounts = $7,900   During 2009, their credit sales were $1,173,000 and collections on A/R were $1,150,000.   The following additional transactions occurred during the year:   Feb 17, wrote off XXX Account, $3.600   May 28, wrote off YYY Account, $2,400   Dec 15, wrote off ZZZ Account, $900   Dec 31, recorded bad debts expense assuming that Penman's policy is to record bad debts expense at 0.8% of credit sales (Hint: The allowance account is increased by 0.8% of credit sales regardless of write-offs.)   Compute the ending balance in A/R and the allowance for uncollectible accounts. Show how Pental's Dec 31, 2009 balance sheet reports the two accounts.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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At the beginning of 2009, Pental Company had the following balances:

 

A/R = $122,000

 

Allowance for Uncollectible Accounts = $7,900

 

During 2009, their credit sales were $1,173,000 and collections on A/R were $1,150,000.

 

The following additional transactions occurred during the year:

 

Feb 17, wrote off XXX Account, $3.600

 

May 28, wrote off YYY Account, $2,400

 

Dec 15, wrote off ZZZ Account, $900

 

Dec 31, recorded bad debts expense assuming that Penman's policy is to record bad debts expense at 0.8% of credit sales (Hint: The allowance account is increased by 0.8% of credit sales regardless of write-offs.)

 

Compute the ending balance in A/R and the allowance for uncollectible accounts. Show how Pental's Dec 31, 2009 balance sheet reports the two accounts.

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