Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 5, Problem 5.66BP
(Learning Objective 5: Apply GAAP for uncollectible receivables) The September 30, 2019, records of West Point Communications include these accounts:
| $249,000 | |
| Allowance for Doubtful Accounts.............. | (8,000) |
During the year, West Point Cotm1unications 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:
During the last quarter of 2019, the company completed the folloWing selected transactions:
| Nov 30 | Wrote off as uncollectible the $1,200 account receivable from Looper carpets and the $800 account receivable from Williams Antiques |
| Dec 31 | Adjusted the Allowance for Uncollectible Accounts and recorded uncollectible-account expense at year-end, based on the again of receivable. |
Requirements
- 1. Record the transactions for the last quarter of 2019 in the journal. Explanations are not required.
- 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. Show how West Point 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 $4,800.
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Chapter 5 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
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