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.

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
Transcribed Image Text: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.
Transcribed Image Text: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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