The June 30, 2019, balance sheet of Ram Technologies reports the following: Accounts Receivable…………………………………. $265,000 Allowance for Uncollectible Accounts (Cr)…………. 7,100 At the end of each quarter, RAM estimates uncollectible-account expense to be 2% of credit sales. 4 At the end of the year, RAM ages its accounts receivable. RAM then adjusts the balance in the Allowance for Uncollectible Accounts to correspond to the aging schedule. During the second half of 20X9, RAM completed the following transactions: July 14 Made a compound entry to write off uncollectible accounts: T.J. Dooley, $700; Design Works, $2,400; and S. DeWitt, $100. Sept. 30 Recorded uncollectible-account expense equal to 2% of credit sales of $140,000 Nov. 22 Wrote off accounts receivable as uncollectible: Transnet, $1,300; Webvan, $2,100; and Alpha Group, $700. Dec. 31 Recorded uncollectible-account expense based on the aging of receivables Age of Accounts 1-30 31 – 60 61 – 90 Over 90 Total Days Days Days Days $255,000 $120,000 $80,000 $40,000 15,000 Estimated (%) uncollectible 0.5% 1.0% 4% 50% Required: i) Record the transactions in the journal. ii) Open the Allowance for Uncollectible accounts, and post entries affecting that account. Keep a running balance. iii)Show how RAM Technologies should report accounts receivable on its December 31, 20X9, balance sheet
The June 30, 2019,
Accounts Receivable…………………………………. $265,000
Allowance for Uncollectible Accounts (Cr)…………. 7,100
At the end of each quarter, RAM estimates uncollectible-account expense to be 2% of credit sales. 4 At the end of the year, RAM ages its accounts receivable. RAM then adjusts the balance in the Allowance for Uncollectible Accounts to correspond to the aging schedule. During the second half of 20X9, RAM completed the following transactions:
July 14 Made a compound entry to write off uncollectible accounts: T.J. Dooley, $700; Design Works, $2,400; and S. DeWitt, $100.
Sept. 30 Recorded uncollectible-account expense equal to 2% of credit sales of $140,000
Nov. 22 Wrote off accounts receivable as uncollectible: Transnet, $1,300; Webvan, $2,100; and Alpha Group, $700.
Dec. 31 Recorded uncollectible-account expense based on the aging of receivables
Age of Accounts
1-30 31 – 60 61 – 90 Over 90
Total Days Days Days Days $255,000 $120,000 $80,000 $40,000 15,000
Estimated (%) uncollectible 0.5% 1.0% 4% 50%
Required: i) Record the transactions in the journal.
- ii) Open the Allowance for Uncollectible accounts, and
post entries affecting that
account. Keep a running balance.
iii)Show how RAM Technologies should report accounts receivable on its December 31, 20X9, balance sheet
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