Chapter 5, Problem 5.19AE

 LO 4, 5

(Learning Objectives 4, 5: Account for accounts receivable and uncollectible receivables) On June 30, Premier Party Planners had a $35,000 balance in Accounts Receivable and a $2,752 credit balance in Allowance for Uncollectible Accounts. During July, Premier made credit sales of $193,000. July collections on account were $164,000, and write-offs of uncollectible receivables totaled $2,870. Uncollectible-accounts expense is estimated as 3% of credit sales. No sales returns are expected. Ignore cost of goods sold.

Requirements

  1.    Journalize sales, corrections write-offs of uncollectibles, and uncollectible-account expense by the allowance method during July. Explanations are not required.

  2.    Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Net Accounts Receivable at July 31. How much does Premier expect to collect?

  3.    Show how Premier Party Planners» will report accounts receivable and net sales on its July 31 Balance sheet and income statement for the month ended July 31.