Chapter 9, Problem P9.29APGA

Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet

Learning Objectives 1, 3 2. Allowance CR Bal. $8,482 at Dec. 31, 2018

At September 30, 2018, the accounts of Green Terrace Medical Center (GTMC) include the following

Accounts Receivable $145,000 Allowance for Bad Debts (credit balance) 3,500

During the last quarter of 2018, GTMC completed the following selected transactions:
• Sales on account. $450,000. Ignore Cost of Goods Sold.
• Collections on account, $427,100
• Wrote off accounts receivable as uncollectible: Regan. Co.. $ 1.400; Owen Reis, $800; and Patterson. Inc., $700
• Recorded bad debts expense based on the aging of accounts receivable, as follows:

	Age of Accounts
	1-10 Day 31-60 61-90 Over 90 Days Days Days
Accounts Receivable Estimated percent uncollectible	$104,000 $39,000 $14,000 $8,000 0.3% 3% 30% 35%

Requirements

1. Open T-accounts for Accounts Receivable and Allowance for Bad Debts. Journalize the transactions (omit explanations) and post to the two accounts.
2. Show how Green Terrace Medical Center should report net accounts receivable on its December 31, 2018, balance sheet.