Chapter 5, Problem 5.58AP

(Learning Objective 5: Apply GAAP for uncollectible receivables) The September 30, 2019, records of New York Communications include these accounts:

Accounts Receivable ..................................	$244,000
Allowance for Doubtful Accounts…..	(8,000)

During the year, New York Communications estimates Uncollectible-account expense at 1% of credit sales. At year-end (December 31), the company ages its receivables and adjusts the balance in Allowance for Uncollectible Accounts to correspond to the following aging schedule.

		Age of Accounts
Accounts Receivable	1-30 Days	31-60 Days	61-90 Days	Over 90 Days
$238,000	$1,44,000	$49,000	$17,000	$28,000
Estimated percent uncollectible	0.2%	2%	15%	35%

During the last quarter of 2019, the company completed the following selected transactions:

Nov 30	Wrote off as uncollectible the S 1,300 account receivable from Clupper Carpets and the $500 account receivable from Medina Antiques.
Dec 31	Adjusted the Allowance for Uncollectible Accounts and recorded uncollectible-account expense at year-end, based on the aging of receivables.

Requirements

1. 1. Record the transactions for the last quarter of 2019 in the journal. Explanations are not required.
2. 2. Prepare a T-account for Allowance for Uncollectible Accounts with the appropriate beginning balance. Post the entries from requirement 1 to that account.
3. 3. Show how New York Communications will report its accounts receivable in a comparative balance sheet for 2018 and 2019. (Use the three-line reporting format.) At December 31, 2018, the company's Accounts Receivable balance was $212,000, and the Allowance for Uncollectible Accounts stood at $4,300.