Slow Running Shoes uses the Aging of receivables method to account for uncollectible accounts. The balance in the Allowance for uncollectible account as at Jan 1st, 2010 was $10,500 (credit) o The balance in the Accounts Receivable account as at Jan 1“, 2010 was $133,000. The company completed the following transactions during 2010 and 2011: 2010 Wrote off the balance of $600 from Manny Miller's account as uncollectible June 10th Re-instated the account of Betty Lou and recorded the collection of $1200 as payment in full for her account which had been written off earlier Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $14,100 of accounts receivable was estimated as uncollectible Made the closing entry for the uncollectible September 15th December 31st December 31st expense account 2011 Sold inventory to Jack Frost, $1100, on Jan 17 account Wrote off as uncollectible the accounts of August 15 Barry Semper, $1,500; Maria Jesus $1,400 and Rory Paul $200 Received 40% of the amount owed by Jack Frost and wrote off the remainder as uncollectible Received 20% of the funds owed from Maria September 26 Jesus as part payment of her account which had been written off earlier as uncollectible October 16 The Aging schedule showed an estimated $7500 as uncollectible December 31
Slow Running Shoes uses the Aging of receivables method to account for uncollectible accounts. The balance in the Allowance for uncollectible account as at Jan 1st, 2010 was $10,500 (credit) o The balance in the Accounts Receivable account as at Jan 1“, 2010 was $133,000. The company completed the following transactions during 2010 and 2011: 2010 Wrote off the balance of $600 from Manny Miller's account as uncollectible June 10th Re-instated the account of Betty Lou and recorded the collection of $1200 as payment in full for her account which had been written off earlier Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $14,100 of accounts receivable was estimated as uncollectible Made the closing entry for the uncollectible September 15th December 31st December 31st expense account 2011 Sold inventory to Jack Frost, $1100, on Jan 17 account Wrote off as uncollectible the accounts of August 15 Barry Semper, $1,500; Maria Jesus $1,400 and Rory Paul $200 Received 40% of the amount owed by Jack Frost and wrote off the remainder as uncollectible Received 20% of the funds owed from Maria September 26 Jesus as part payment of her account which had been written off earlier as uncollectible October 16 The Aging schedule showed an estimated $7500 as uncollectible December 31
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:Slow Running Shoes uses the Aging of receivables method to account for uncollectible
accounts.
The balance in the Allowance for uncollectible account as at Jan 1st, 2010 was $10,500
(credit)
o The balance in the Accounts Receivable account as at Jan 1st, 2010 was $133,000.
The company completed the following transactions during 2010 and 2011:
2010
Wrote off the balance of $600 from Manny
Miller's account as uncollectible
Re-instated the account of Betty Lou and
recorded the collection of $1200 as payment
June 10th
September 15th
in full for her account which had been written
off earlier
Recorded the uncollectible account expense
based on the aging schedule. The schedule
showed that $14,100 of accounts receivable
was estimated as uncollectible
December 31st
December 31st
Made the closing entry for the uncollectible
expense account
2011
Sold inventory to Jack Frost, $1100, on
Jan 17
account
Wrote off as uncollectible the accounts of
Barry Semper, $1,500; Maria Jesus $1,400
and Rory Paul $200
Received 40% of the amount owed by Jack
Frost and wrote off the remainder as
August 15
September 26
uncollectible
Received 20% of the funds owed from Maria
Jesus as part payment of her account which
had been written off earlier as uncollectible
October 16
The Aging schedule showed an estimated
$7500 as uncollectible
December 31
Required:
1. Prepare journal entries for each transaction (No narrations required)
2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on
the information presented and balance off each account.
3. Prepare the balance sheet extracts as at Dec 31 2010 & 2011 to show the net realizable
value for the Accounts Receivable.
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