Learning Objective 3 2 Dec 31, 2014 Alowance CR Bal 35,288 P9-35B Accounting for uncollectible accounts using the allowance method (aging-of-receivables), and reporting receivables on the balance sheet At September 30, 2014, the accounts of Park Terrace Medical Center (TTMC) include the following Accounts Receivable $ 141,000 Allowance for Bad Debts (credit balance) 3,400 During the last quarter of 2014, PTMC completed the following selected transactions Dec 28 Wrote off accounts receivable as uncollectible: Red, Co., 51,600, Jacob Weiss, 51,300, and Star, Inc., 5300 31 Recorded bad debts expense based on the aging of accounts receivable, as follows Accounts Receivable 5161,000 Estimated percent uncollectible Age of Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days 599,000 $42.000 $15,000 $5,000 0.2% 2% 20% 25% Requirements 1. Journalize the transactions 2. Open the Allowance for Bad Debes 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, 2014, balance sheet. present Accounts and Explanation Debit Date 2014 Dec. 28 Credit Dec. 31 Total Recivables 1 - 30 Days Accounts Receivable 599,000 Percent uncollectible x 0.2% Estimated total uncollectible Age of Accounts Reccivable 31-60 61-90 Over 90 Days Days Days $ 42,000 $ 15,000 $5,000 x 2.0% x 20.0% x 25.0% $ 161,000 Requirement 2 Allowance for Bad Debts Requirement 3 PARK TERRACE MEDICAL CENTER Balance Sheet-Partial December 31, 2014 Assets Current Assets: Accounts Receivable Less: Allowance for Bad Debts Net A/R