Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 5, Problem 5.4BP
Record transactions related to uncollectible accounts (LO5–4, 5–5)
Facial Cosmetics provides plastic surgery primarily to hide the appearance of unwanted scars and other blemishes. During 2018, the company provides services of $410,000 on account. Of this amount, $60,000 remains uncollected at the end of the year. An aging schedule as of December 31, 2018, is presided below.
| Age Group | Amount Receivable | Estimated Percent Uncollectible |
| Not yet due | $40,000 | 3% |
| 0–30 days past due | 11,000 | 4% |
| 31–60 days past due | 8,000 | 11% |
| More than 60 days past due | 1,000 | 25% |
| Total | $60,000 |
Required:
1. Calculate the allowance for uncollectible accounts.
2. Record the December 31, 2018, adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $400 (debit).
3. On April 3, 2019, a customer’s account balance of $500 is written off as uncollectible. Record the write-off.
4. On July 17, 2019, the customer whose account was written off in Requirement 3 unexpectedly pays $100 of the amount but does not expect to pay any additional amounts. Record the cash collection.
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Problem 5-4A (Algo) Record transactions related to uncollectible accounts (LO5-4, 5-5)
Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2024, Pearl provides services on account of $581,000.
Of this amount, $71,000 remains receivable at the end of the year. An aging schedule as of December 31, 2024, is provided below.
Age Group
Not yet due
8 to 90 days past
due
91 to 180 days past.
due
More than 180 days.
past due
Total
Req 1
Age Group
Required:
1. Calculate the allowance for uncollectible accounts.
2. Record the December 31, 2024, adjusting entry, assuming the balance of Allowance for Uncollectible Accounts before adjustment is
$4,100 (credit).
3. On July 19, 2025, a customer's account balance of $7,100 is written off as uncollectible. Record the write-off.
4. On September 30, 2025, the customer whose account was written off in requirement 3 unexpectedly pays the full amount. Record
the cash collection.
Complete this question by entering your answers in…
1) 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 Roxbury Medical Center (RMC) include the following:
Accounts Receivable
$154,000
Allowance for Bad Debts (credit balance)
3,700
During the last quarter of 2018, RMC completed the following selected transactions:
Sales on account, $465,000. Ignore Cost of Goods Sold.
Collections on account, $441,800.
Wrote off accounts receivable as uncollectible: Jenkins, Co., $1,900; Sony, $800; and Smith, Inc., $500
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
$ 97,000
$ 37,000
$ 17,000
$ 14,000
Estimated percent uncollectible
0.2%
3.5%
29%
32%
Page Break
Requirements
1.Open T-accounts for Accounts Receivable…
6) Brotherhood Company had the following information relating to its accounts receivable:
Accounts receivable, 12/31/21
1,300,000
Credit sales for 2022
5,400,000
4,750,000
125,000
Collections from customers for 2022, excluding recovery
Accounts written off 9/30/22
Collection of accounts written off in prior year (customer credit was not
reestablished)
Estimated uncollectible receivable per aging of receivable at 12/31/22
25,000
165,000
On December 31, 2022, the amortized cost of accounts receivable is
a. 1,825,000
b. 1,800,000
c. 1,635,000
d. 1,660,000
Chapter 5 Solutions
Financial Accounting
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Ch. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Discuss the differences between the allowance...Ch. 5 - 17.Notes receivable differ from accounts...Ch. 5 - With respect to notes receivable, explain what...Ch. 5 - Prob. 19RQCh. 5 - Interest on a note receivable typically is due...Ch. 5 - Prob. 21RQCh. 5 - Prob. 22RQCh. 5 - Prob. 23RQCh. 5 - Prob. 24RQCh. 5 - Prob. 25RQCh. 5 - Prob. 5.1BECh. 5 - Calculate net sales (LO52) Kellys Jewelry has the...Ch. 5 - At the end of the first war of operations,...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Prob. 5.5BECh. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Prob. 5.7BECh. 5 - Prob. 5.8BECh. 5 - Prob. 5.9BECh. 5 - Record the write-off of uncollectible accounts...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Sanders Inc. is a small brick manufacturer that...Ch. 5 - Prob. 5.14BECh. 5 - Prob. 5.15BECh. 5 - Prob. 5.16BECh. 5 - Prob. 5.17BECh. 5 - Refer to the information in BE517, but now assume...Ch. 5 - Match each of the following terms with its...Ch. 5 - Prob. 5.1ECh. 5 - Prob. 5.2ECh. 5 - Record credit sale and cash collection with a...Ch. 5 - Prob. 5.4ECh. 5 - Prob. 5.5ECh. 5 - On April 25, Foreman Electric installs wiring in a...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Physicians Hospital has the following balances on...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Consider the following transactions associated...Ch. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Record notes receivable an interest revenue (LO57)...Ch. 5 - Prob. 5.18ECh. 5 - Compare the percentage of receivables method and...Ch. 5 - Compare the percentage-of-receivables method and...Ch. 5 - Compare the accounting cycle using receivable...Ch. 5 - Prob. 5.1APCh. 5 - Prob. 5.2APCh. 5 - Record transactions related to accounts receivable...Ch. 5 - Record transactions related to uncollectible...Ch. 5 - Compare the direct write-off method to the...Ch. 5 - Prob. 5.6APCh. 5 - Overestimating future uncollectible accounts...Ch. 5 - Prob. 5.8APCh. 5 - Assume selected financial data for Walmart and...Ch. 5 - Calculate the amount of revenue to recognize...Ch. 5 - Prob. 5.2BPCh. 5 - Record transactions related to accounts receivable...Ch. 5 - Record transactions related to uncollectible...Ch. 5 - Compare the direct write-off method to the...Ch. 5 - Prob. 5.6BPCh. 5 - Underestimating future uncollectible accounts...Ch. 5 - Prob. 5.8BPCh. 5 - Assume selected financial data for Sun Health...Ch. 5 - Prob. 5.1APCPCh. 5 - American Eagle Outfitters, Inc. Financial...Ch. 5 - Prob. 5.3APFACh. 5 - Prob. 5.4APCACh. 5 - Prob. 5.5APECh. 5 - Prob. 5.6APIRCh. 5 - Written Communication You have been hired as a...Ch. 5 - Earnings Management Ernie Upshaw is the...
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