Question

Max’s Plumbing Supplies Ltd. uses the percent of sales method to estimate the uncollectible accounts expense for its monthly financial reporting, the aging of receivables method for its year-end reporting, and a perpetual inventory system. The company had a $1,500.50 credit balance in the Allowance for Doubtful Accounts on November 1, 2015. The following selected transactions were completed during the final two months of the current fiscal year by Max’s Plumbing Supplies Ltd.:
Nov. 10. Received $525 as partial payment on the $750 account of T. Robson Construction Co. Wrote off the balance as uncollectible.
Nov. 15. Recorded a sale on account of $10,564 to B. Merck. The cost of goods sold was $6,500.
16. Wrote off account of Cutlers Ltd., $1,025.50.
22. Received $9,500 as partial payment on the $20,000 account of Master Distributors Ltd. Max’s accountant believes the account balance is collectible.
30. Based on past history, 3% of sales are expected to be uncollectible.
Max’s Plumbing Supplies Ltd. recorded sales of $105,677 during November.
Dec. 1. Recorded a sale on account of $2,290 to Smith Construction Ltd; cost of goods sold was $1,550.
5. Received $600 from Cutlers Ltd., which had been written off on November 16. Reinstated the portion of the account and recorded the cash receipt.
31. Wrote off the following accounts as uncollectible (record as a compound journal entry):
B. Paxton ............. $ 576.10
Western Construction Co. ...... 1,377.25
Able Construction Ltd. ....... 10,600.00
31. Prepared the adjusting entry using the following accounts receivable aging schedule:
Instructions
Journalize the transactions.


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  • CreatedSeptember 15, 2015
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