You must use the associated Excel worksheet to complete all
Question P9-29
You must use the associated Excel worksheet to complete all assigned exercises/problems. No other format will be accepted.
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P9-29A
| P9-29A | Accounting for uncollectible accounts using the allowance method | |||||||||
| (aging-of-receivables) and reporting receivables on the balance sheet | ||||||||||
| At September 30, 2018, the accounts of Green Terrace Medical Center (GTMC) include | ||||||||||
| the following: | Accounts Receivable | $145,000 | ||||||||
| Allowance for Bed Debt (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 | ||||||||||
| 1-30 days | 31-60 days | 61-90 days | Over 90 | |||||||
| days | ||||||||||
| Accounts Receivable | $104,000 | $39,000 | $14,000 | $8,000 | ||||||
| Estimated percent uncollectible | 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. | |||||||||
| Solution: | ||||||||||
| Requirements 1 and 2 | ||||||||||
| Date | Accounts and Explanation | Debit | Credit | |||||||
| 2018 | Accounts Receivable | – 0 | ||||||||
| Sales Revenue | – 0 | |||||||||
| Cash | – 0 | |||||||||
| Accounts Receivable | – 0 | |||||||||
| Allowance fo Bad Debts | – 0 | |||||||||
| Accounts Receivable-Regan, Co. | – 0 | |||||||||
| Accounts Receivable-Owen Reiss | – 0 | |||||||||
| Accounts Receivable-Patterson, Inc. | – 0 | |||||||||
| Dec. 31 | Bad Debts Expense | – 0 | ||||||||
| Allowance for Bad Debts | – 0 | |||||||||
| Age of Accounts Receivable | ||||||||||
| 1 – 30 Days | 31 – 60 Days | 61 – 90 Days | Over 90 Days | Total Receivables | ||||||
| Accounts Receivable | – 0 | – 0 | – 0 | – 0 | – 0 | |||||
| Percent uncollectible | 0% | 0% | 0% | 0% | ||||||
| Estimated total uncollectible | – 0 | – 0 | – 0 | – 0 | – 0 | |||||
| Requirement 2 | ||||||||||
| Accounts Receivable | Allowance for Bad Debts | |||||||||
| 9/30 Balance | – 0 | – 0 | Collections | Write-off | – 0 | – 0 | 9/30 Balance | |||
| Net credit sales | – 0 | – 0 | Write-offs | – 0 | Unadj. Bal. | |||||
| – 0 | Adj. | |||||||||
| Dec. 31 Balance | – 0 | – 0 | Dec. 31 Balance | |||||||
| Requirement 2 | ||||||||||
| GREEN TERRACE MEDICAL CENTER | ||||||||||
| Balance Sheet—Partial | ||||||||||
| December 31, 2018 | ||||||||||
| Assets | ||||||||||
| Current Assets: | ||||||||||
| Accounts Receivable | $ – 0 | |||||||||
| Less: Allowance for Bad Debts | – 0 | $ – 0 | ||||||||
&"Arial,Bold"&12HORNGREN'S ACCOUNTING – 12th Edition
&"Arial,Bold"Chapter 9: Receivables &"Arial,Bold"Page &P of &N
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