Chapter 9, Problem P9.28APGA

Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet

At September 30, 2016, the accounts of Park Terrace Medical Center (PTMC) include the following:

Accounts Receivable	$ 143,000
Allowance for Bad Debts (credit balance)	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 post entries affecting that account. Keep a running balance.

3. Show how Park Terrace Medical Center should report net accounts receivable on its December 31, 2016, balance sheet