Accounting for uncollectible accounts - allowance method
Not what you're looking for?
Accounting for uncollectible accounts using the allowance method, and reporting receivables on the balance sheet
At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC) include the following:
Accounts receivable $145,000
Allowance for uncollectible accounts (credit balance) 3,500
During the last quarter of 2012, MTMC completed the following selected transactions:
Dec 28
Wrote off accounts receivable as uncollectible: Regan, Co., $1,300; Owen Mac, $900; and Rain, Inc., $700.
Dec 31
Recorded uncollectible account expense based on the aging of accounts receivable, as follows:
AGE OF ACCOUNTS
Accounts Receivable 1-30 days 31-60 days 61-90 days over 90 days
$165,000 $97,000 $37,000 $14,000 $17,000
Est. % uncollectible .03% 3% 30% 35%
Requirements
1. Journalize the transactions.
2. Open the Allowance for uncollectible accounts T-account, and post entries affecting that account. Keep a running balance.
3. Show how Mountain Terrace Medical Center should report net accounts receivable on its December 31, 2012 balance sheet. Use the three line reporting format.
Purchase this Solution
Solution Summary
This solution illustrates how to compute the allowance for uncollectible accounts using an aging schedule and how to journalize the necessary transactions.
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.