Facial Cosmetics provides plastic surgery primarily to hide the appearance of unwanted scars and other blemishes. During 2021, the company provides services of $410,000 on account. Of this amount, $60,000 remains uncollected at the end of the year. An aging schedule as ofDecember 31, 2021, is provided below. Age Group AmountReceivable Estimated PercentUncollectible Not yet due $40,000 3% 0–30 days past due 11,000 4% 31–60 days past due 8,000 11% More than 60 days past due 1,000 25% Total $60,000 Required:1. Calculate the allowance for uncollectible accounts.2. Record the December 31, 2021, adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $400 (debit).3. On April 3, 2022, a customer’s account balance of $500 is written off as uncollectible. Record the write-off.4. On July 17, 2022, the customer whose account was written off in requirement 3 unexpectedly pays $100 of the amount but does not expect to pay any additional amounts. Record the cash collection.
Facial Cosmetics provides plastic surgery primarily to hide the appearance of unwanted scars and other blemishes. During 2021, the company provides services of $410,000 on account. Of this amount, $60,000 remains uncollected at the end of the year. An aging schedule as ofDecember 31, 2021, is provided below. Age Group AmountReceivable Estimated PercentUncollectible Not yet due $40,000 3% 0–30 days past due 11,000 4% 31–60 days past due 8,000 11% More than 60 days past due 1,000 25% Total $60,000 Required:1. Calculate the allowance for uncollectible accounts.2. Record the December 31, 2021, adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $400 (debit).3. On April 3, 2022, a customer’s account balance of $500 is written off as uncollectible. Record the write-off.4. On July 17, 2022, the customer whose account was written off in requirement 3 unexpectedly pays $100 of the amount but does not expect to pay any additional amounts. Record the cash collection.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 94.1C
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Facial Cosmetics provides plastic surgery primarily to hide the appearance of unwanted scars and other blemishes. During 2021, the company provides services of $410,000 on account. Of this amount, $60,000 remains uncollected at the end of the year. An aging schedule as of
December 31, 2021, is provided below.
| Age Group | Amount Receivable |
Estimated Percent Uncollectible |
| Not yet due | $40,000 | 3% |
| 0–30 days past due | 11,000 | 4% |
| 31–60 days past due | 8,000 | 11% |
| More than 60 days past due | 1,000 | 25% |
| Total | $60,000 |
Required:
1. Calculate the allowance for uncollectible accounts.
2. Record the December 31, 2021, adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $400 (debit).
3. On April 3, 2022, a customer’s account balance of $500 is written off as uncollectible. Record the write-off.
4. On July 17, 2022, the customer whose account was written off in requirement 3 unexpectedly pays $100 of the amount but does not expect to pay any additional amounts. Record the cash collection.
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