Question 29. Ignore Cost of Goods Sold.Collections on account, $584,000.Write-offs of uncollectible receivables, $4,000.Requirements1. Journalize all September entries using the allowance method. Bad debts expense wasestimated at 2% of credit sales. Show all September activity in Accounts Receiv-able, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts).2. Using the same facts, assume that Bouquet used the direct write-off method toaccount for uncollectible receivables. Journalize all September entries using thedirect write-off method. Post to Accounts Receivable and Bad Debts Expense, andshow their balances at September 30, 2018.3. What amount of Bad Debts Expense would Bouquet report on its Septemberincome statement under each of the two methods? Which amount better matchesexpense with revenue? Give your reason.4. What amount of net accounts receivable would Bouquet report on its September30, 2018, balance sheet under each of the two methods? Which amount is morerealistic? Give your reason.P8-29A Accounting for uncollectible accounts using the allowance method(aging-of-receivables) and reporting receivables on the balance sheetLearning Objectives 1, 3At September 30, 2018, the accounts of Green Terrace Medical Center (GTMC)include the following:2. Allowance CR Bal. $8,482 atDec. 31, 2018Accounts Receivable$ 145,000Allowance for Bad Debts (credit balance)3,500During the last quarter of 2018, GTMC completed the following selected transactions:Sales on account, $450,000. Ignore Cost of Goods Sold.Collections on account, $427,100Wrote off accounts receivable as uncollectible: Regan, Co., $1,400; Owen Reis, $800;and Patterson, Inc., $700Recorded bad debts expense based on the aging of accounts receivable, as follows:Age of Accounts1-30 Days31-6061-90Over 90DaysDaysDays$ 104,000$ 39,000$ 14,000$ 8,000Accounts Receivable0.3%3%30%35%Estimated percent uncollectible 1. Open T-accounts for Accounts Receivable and Allowance for Bad Debts.Journalize the transactions (omit explanations) and post to the two accounts.Requirements2. Show how Green Terrace Medical Center should report net accounts receivable onits December 31, 2018, balance sheet.P8-30A Accounting for uncollectible accounts using the allowance method(percent-of-sales) and reporting receivables on the balance sheetDelta Watches completed the following selected transactions during 2018Objectives 1, 3et AR $119,800and 2019:2018Estimated that bad debts expense for the year was 2% of credit sales of$450,000 and recorded that amount as expense. The company uses theallowance method.Dec. 3131Made the closing entry for bad debts expense.2019Jan. 17Sold merchandise inventory to Mack Smith, $400, on account. Ignore Cost ofGoods Sold.Jun. 29Wrote off Mack Smith's account as uncollectible after repeated efforts tocollect from him.Aug. 6 Received $400 from Mack Smith, along with a letter apologizing for being solate. Reinstated Smith's account in full and recorded the cash receipt.Dec. 31 Made a compound entry to write off the following accounts as uncollectible:Cam Carter, $1,400; Mike Venture, $1,200; and Russell Reeves, $400.31 Estimated that bad debts expense for the year was 2% on credit sales of$510,000 and recorded the expense.31Made the closing entry for bad debts expense.Requirements1. Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assumingthe accounts begin with a zero balance. Record the transactions in the general journal(omit explanations), and post to the two T-accounts.2. Assume the December 31, 2019, balance of Accounts Receivable is $136.000Show how net accounts receivable would be reported on the balance shethat date.

Bad debt Expense Age 1-30 days 31-60 days 61-90 days over 90 days Balance…

Answered: Requirements 1. Open T-accounts for…

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Question 29.

Ignore Cost of Goods Sold.
Collections on account, $584,000.
Write-offs of uncollectible receivables, $4,000.
Requirements
1. Journalize all September entries using the allowance method. Bad debts expense was
estimated at 2% of credit sales. Show all September activity in Accounts Receiv-
able, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts).
2. Using the same facts, assume that Bouquet used the direct write-off method to
account for uncollectible receivables. Journalize all September entries using the
direct write-off method. Post to Accounts Receivable and Bad Debts Expense, and
show their balances at September 30, 2018.
3. What amount of Bad Debts Expense would Bouquet report on its September
income statement under each of the two methods? Which amount better matches
expense with revenue? Give your reason.
4. What amount of net accounts receivable would Bouquet report on its September
30, 2018, balance sheet under each of the two methods? Which amount is more
realistic? Give your reason.
P8-29A Accounting for uncollectible accounts using the allowance method
(aging-of-receivables) and reporting receivables on the balance sheet
Learning Objectives 1, 3
At September 30, 2018, the accounts of Green Terrace Medical Center (GTMC)
include the following:
2. Allowance CR Bal. $8,482 at
Dec. 31, 2018
Accounts Receivable
$ 145,000
Allowance for Bad Debts (credit balance)
3,500
During the last quarter of 2018, GTMC completed the following selected transactions:
Sales on account, $450,000. Ignore Cost of Goods Sold.
Collections on account, $427,100
Wrote off accounts receivable as uncollectible: Regan, Co., $1,400; Owen Reis, $800;
and Patterson, Inc., $700
Recorded bad debts expense based on the aging of accounts receivable, as follows:
Age of Accounts
1-30 Days
31-60
61-90
Over 90
Days
Days
Days
$ 104,000
$ 39,000
$ 14,000
$ 8,000
Accounts Receivable
0.3%
3%
30%
35%
Estimated percent uncollectible

1. Open T-accounts for Accounts Receivable and Allowance for Bad Debts.
Journalize the transactions (omit explanations) and post to the two accounts.
Requirements
2. Show how Green Terrace Medical Center should report net accounts receivable on
its December 31, 2018, balance sheet.
P8-30A Accounting for uncollectible accounts using the allowance method
(percent-of-sales) and reporting receivables on the balance sheet
Delta Watches completed the following selected transactions during 2018
Objectives 1, 3
et AR $119,800
and 2019:
2018
Estimated that bad debts expense for the year was 2% of credit sales of
$450,000 and recorded that amount as expense. The company uses the
allowance method.
Dec. 31
31
Made the closing entry for bad debts expense.
2019
Jan. 17
Sold merchandise inventory to Mack Smith, $400, on account. Ignore Cost of
Goods Sold.
Jun. 29
Wrote off Mack Smith's account as uncollectible after repeated efforts to
collect from him.
Aug. 6 Received $400 from Mack Smith, along with a letter apologizing for being so
late. Reinstated Smith's account in full and recorded the cash receipt.
Dec. 31 Made a compound entry to write off the following accounts as uncollectible:
Cam Carter, $1,400; Mike Venture, $1,200; and Russell Reeves, $400.
31 Estimated that bad debts expense for the year was 2% on credit sales of
$510,000 and recorded the expense.
31
Made the closing entry for bad debts expense.
Requirements
1. Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assuming
the accounts begin with a zero balance. Record the transactions in the general journal
(omit explanations), and post to the two T-accounts.
2. Assume the December 31, 2019, balance of Accounts Receivable is $136.000
Show how net accounts receivable would be reported on the balance she
that date.

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Question 2
Showbiz Sportswear completed the following selected transactions during 2008 & 2009:
2008
Dec. 31 Estimated that uncollectible-account (bad-debt) expense for the year was 1% of credit
sales of $450,000 and recorded the amount as expense. Use the allowance method.
Dec. 31 Made the closing entry for uncollectible-account expense.
2009
Feb. 4 Sold inventory to Marian Holt, $1,500 on account. Ignore cost of goods sold.
July 1 Wrote off Marian Holt’s account as uncollectible after repeated effort to collect from
her.
Nov. 19 Received $1,500 from Marian Holt, along with a letter apologizing for being so late.
Reinstated Holt’s account in full and recorded the cash receipt.
Dec. 31 Made a compound entry to write off the following accounts as uncollectible: Kaycee
Britt, $2,300; Tim Sands, $500 and Anna Chin, $1,200.
Dec. 31 Estimated that uncollectible expense for the year was 1% of credit sales of $480,000,
and recorded the expense
Dec. 31 Made the closing entry for uncollectible-account expense.
Requirements:
a) Open general ledger accounts for Allowance for Uncollectible Accounts and
Uncollectible-Accounts Expense. Keep running balances. All accounts begin
with zero balance.
b) Record the transactions in the general journal and post to the two ledger
accounts.
c) The December 31, 2009 balance of Accounts Receivable is $164,500. Show
how Accounts Receivable would be reported on the balance sheet at that date.

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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 Green Terrace Medical Center should report net accounts receivable on its December 31, 2018, balance sheet.