October 1, 20X2, records of Tower
Communications include these accounts:
Accounts Receivable
250.000
Allowance for Uncollectible Accounts
(8,200)
At year-end, the company ages its receivables
and
adjusts the balance in Allowance for Uncollectible
Accounts to correspond to the aging schedule.
During the last quarter of 20X2, the company
completed the following selected transactions:
Requirement 1. Record the transactions in the
journal. Explanations are not required
November 30, 20X2: Wrote off as uncollectible the
$1,200 account receivable from Rothesay Carpets
and the $500 account receivable from Somerset
Antiques. Record debits first, then credits,
Exclude explanations from journal entries.
December 31, 20X2: One of its customers, Plaza
Ltd., agreed to sign a 60-day note receivable to
replace the $1,900 accounts receivable due on
that day.
December 31, 20X2: Adjusted the Allowance for
Uncollectible Accounts and recorded Bad Debt
Expense at year-end, based on the aging of
receivables. Record debits first, then credits.
Requirement 2.
Prepare a T-account for Accounts Receivable and the Allowance for Uncollectible Accounts, and post to those accounts.
Open the T-account by posting the beginning balance. Then, post the entries to the Allowance for Uncollectible Accounts T-account, and compute the ending balance.
requirement3:
Show how Tower would report its accounts receivable on a Comparative Balance Sheet for 20X1 and 20X2. As of December 31, 20X1, the company's Accounts Receivable balance was $209,000, and the Allowance for Uncollectible Accounts stood at
$4,500.
\begin{tabular}{lcccc} \hline \multicolumn{5}{c}{ Age of Accounts } \\ \hline Total Balance & 030 Days & \begin{tabular}{c} 3160 \\ Days \end{tabular} & \begin{tabular}{c} 6190 \\ Days \end{tabular} & \begin{tabular}{c} Over 90 \\ Days \end{tabular} \\ \hline$250,000 & $148,000$ & 36,000$ & 13,000$ & 53,000 \\ Estimated uncollectible & 0.2% & 0.5% & 5.0% & 30% \\ \hline \end{tabular}
