Chapter 5, Problem 5.31BE

LO 4, 5

(Learning Objectives 4, 5: Account for accounts receivable and uncollectible receivables) On November 30, Palmer Party Planners had a $41,000 balance In Accounts Receivable and a $3,584 credit balance in Allowance for Uncollectible Accounts. During December, Palmer made credit sales of $200,000. December collections on account were $168,000, and write-offs of uncollectible receivables totaled $2,910. Uncollectible-account expense is estimated as 1% of credit sales. No sales returns are expected. Ignore cost of goods sold.

Requirements

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

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

  3.    Show how Palmer Party Planners will report Accounts Receivable and net sales on its December 31 balance sheet and income statement for the month ended December 31.