At September 30, 2012, Windy Mountain Flagpoles had Accounts receivable of $34,000 and Allowance for uncollectible accounts
Question:
Sales of $189,000 ($165,000 on account; $24,000 for cash).
Collections on account, $133,000.
Uncollectible account expense, estimated as 1% of credit sales.
Write-offs of uncollectible receivables, $2,800.
Requirements
1. Journalize sales, collections, uncollectible account expense using the allowance method (percent-of-sales method), and write-offs of uncollectibles during October 2012.
2. Prepare T-accounts to show the ending balances in Accounts receivable and
Allowance for uncollectible accounts. Compute net accounts receivable at October 31. How much does Windy Mountain expect to collect?
3. Show how Windy Mountain Flagpoles will report net Accounts receivable on its October 31, 2012 balance sheet.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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