Fundamental Corporation uses allowance method to accounts uncollectible accounts receivables. Credit terms for sales is n30 (net is due at 30 days).

Below is the company?s uncollectible policy:

Monthly provision for uncollectible accounts is 2% of credit sales.

Write-off of bad debts is debited to allowance for uncollectible accounts.

If bad debt is recovered after being written off, the amount is credited to allowance for uncollectible accounts

Below is information about credit sales, bad debt and uncollectible accounts. All accounts are shown in thousands.

January 1, 2017, balance in allowance for uncollectible accounts was $130.

Credit sales for the year was $9,000

As per policy, monthly provision for uncollectible accounts is 2% of credit sales was made throughout the year.

Write-off of bad debts was $90.

Recoveries of accounts previously written off was $15

Aging Reports of accounts receivable based on months of sales is below. This was prepared on December 30, 2017 (the last day of sale for the year). All accounts are shown in thousands.

On December 31, 2017, Guiltier Corporation?s accountant wrote off $60 from the 12/31/2016 accounts receivable balance. The estimated percentage uncollectible is applicable to the remaining balance after the write off.

Requirements:

a. Prepare a schedule as of December 31, 2017 showing the balance in the allowance for uncollectible accounts. Remember to include the write off on this date as described above.

b. Prepare journal-entry for the adjustment to allowance for uncollectible accounts on December 31, 2017.

c. Show how accounts receivables will be shown on Guiltier Corporation?s balance sheet on December 31, 2017.

Transcribed Image Text:

Description 11/1/2017-12/30/2017 7/1/2017 - 10/31/2017 1/1/2017-6/30/2017 12/31/2016 Total Balance $1,080 650 420 150 $2,300 Estimated % Uncollectible 2% 10% 25% 80% Description 11/1/2017-12/30/2017 7/1/2017 - 10/31/2017 1/1/2017-6/30/2017 12/31/2016 Total Balance $1,080 650 420 150 $2,300 Estimated % Uncollectible 2% 10% 25% 80%

Answer rating: 100% (QA)

a Age of Account Category Amount Estimated ... View the full answer