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:
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Dec 28 |
Wrote off accounts receivable as uncollectible: Regan, Co., $1,300; |
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Owen Mac, $900; and Rain, Inc., $700. |
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Dec 31 |
Recorded uncollectible account expense based on the aging of |
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accounts receivable, as follows: |
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Age of Accounts |
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||
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1–30 |
31–60 61–90 |
Over 90 |
||
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Accounts receivable |
Days |
Days Days |
Days |
|
|
$165,000 |
$97,000 |
$ 37,000 |
$ 14,000 |
$ 17,000 |
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Estimated percent |
|
|
|
|
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uncollectible |
0.3% |
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.