Concept explainers
Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the
At September 30, 2016, the accounts of Park Terrace Medical Center (PTMC) include the following:
$ 143,000 | |
Allowance for |
3,300 |
During the last quarter of 2016, PTMC completed the following selected transactions:
Dec. 28 Wrote off accounts receivable as uncollectible: Silver, Co., $ 1,200; Oscar Wells, $1,000; and Rain, Inc., S600
31 Recorded bad debts expense based on the aging of accounts receivable, as follows:
Age of Accounts |
1-30 Days 31-60 Days 61-90 Days Over 90 Days |
Accounts Receivable $103,000 $ 41,000 $ 13,000 $ 6,000 |
Estimated percent uncollectible 0.3% 3% 30% 35% |
Requirements
1. Journalize the transactions.
2. Open the Allowance for Bad Debts T-account, and
3. Show how Park Terrace Medical Center should report net accounts receivable on its December 31, 2016, balance sheet
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Horngren's Accounting (11th Edition)
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