P9-28A Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet Learning Objective 3 2. Allowance CR Bal. $7,539 at Dec. 31, 2016 At September 30, 2016, the accounts of Park Terrace Medical Center (PTMC) include the following: Accounts Receivable $ 143,000 Allowance for Bad Debts (credit balance) 3,300 During the last quarter of 2016, PTMC completed the following selected transactions: Dec. 28 Wrote off accounts receivable as uncollectible: Silver, Co., $1,200; Oscar Wells, $1,000; and Rain Company $600 Recorded bad debts expense based on the aging of accounts receivable, 31 as follows: Age of Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days Accounts Receivable $ 103,000 $ 41,000 $ 13,000 $ 6,000 Estimated percent uncollectible 0.3% 3% 30% 35% Requirements 1. Journalize the transactions. 2. Open the Allowance for Bad Debts T-account, and post entries affecting that account. Keep a running balance. 3. Show how Park Terrace Medical Center should report net accounts receivable on its December 31, 2016, balance sheet.

P9-28A Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet Learning Objective 3 2. Allowance CR Bal. $7,539 at Dec. 31, 2016 At September 30, 2016, the accounts of Park Terrace Medical Center (PTMC) include the following: Accounts Receivable $ 143,000 Allowance for Bad Debts (credit balance) 3,300 During the last quarter of 2016, PTMC completed the following selected transactions: Dec. 28 Wrote off accounts receivable as uncollectible: Silver, Co., $1,200; Oscar Wells, $1,000; and Rain Company $600 Recorded bad debts expense based on the aging of accounts receivable, 31 as follows: Age of Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days Accounts Receivable $ 103,000 $ 41,000 $ 13,000 $ 6,000 Estimated percent uncollectible 0.3% 3% 30% 35% Requirements 1. Journalize the transactions. 2. Open the Allowance for Bad Debts T-account, and post entries affecting that account. Keep a running balance. 3. Show how Park Terrace Medical Center should report net accounts receivable on its December 31, 2016, balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Estimating Uncollectible Accounts and Reporting Accounts ReceivableLaFond Company analyzes its accounts receivable at December 31, and arrives at the age categories below along with the percentages that are estimated as uncollectible. Age Group Accounts Receivable Estimated Loss % 0-30 days past due $ 180,000 1% 31-60 days past due 40,000 2 61-120 days past due 22,000 5 121-180 12,000 10 Over 180 days past due 8,000 25 Total accounts receivable $ 262,000 (b) Use the financial statement effects template to record LaFond's bad debts expense for the year. Use negative signs with your answers, when appropriate. Balance Sheet Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Record bad debts expense Income Statement Revenue - Expenses = Net Income
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