Chapter 5, Problem 5.4AP

Record transactions related to uncollectible accounts (LO5–4, 5–5)

Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2018, Pearl provides services on account of $590,000. Of this amount, $80,000 remains receivable at the end of the war. An aging schedule as of December 31, 2018, is provided below.

Age Group	Amount Receivable	Estimated Percent Uncollectible
Not yet due	$40,000	4%
0–90 days past due	16,000	20%
91–180 days past due	11,000	25%
More than 180 days past due	13,000	80%
Total	$80,000

Required:

1.    Calculate the allowance for uncollectible accounts.

  2.    Record the December 31, 2018, adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $5,000 (credit).

  3.    On July 19, 2019, a customer’s account balance of $8,000 is written off as uncollectible. Record the write-off.

  4.    On September 30, 2019, the customer whose account was written off in Requirement 3 unexpectedly pays the full amount. Record the cash collection.