The statement of financial position (balance sheet) of Advanced Technologies at
ID: 2577566 • Letter: T
Question
The statement of financial position (balance sheet) of Advanced Technologies at 30 June 2016 reported the following:
Accounts receivable……………………………………………… $1,060,000
Allowance for doubtful accounts (credit balance)…………...... 21,600
At the end of the year, Advanced Technologies ages its accounts receivable and then adjusts the balance in the allowance for doubtful account to correspond to the aging schedule. During the year ended 30 June 2017, Advanced Technologies completed the following transactions:
Jul 14 Wrote off account receivable as uncollectible:
Grace Wong, $2,800; Design Inc., $9,600; and SM Chung,$400
Nov 22 Wrote off accounts receivable as uncollectible:
Tommy Chan, $5,200; Kathy Li, $8,400; and Beta Group, $2,800
Jun 30 Recorded uncollectible-account expense based on the aging of receivables.
Age of Accounts as at 30 June 2017
Required
a) Record the transactions in the journal.
b) Open the allowance for doubtful accounts, and post entries affecting that account. Keep a running balance.
c) Show how Advanced Technologies should report accounts receivable on its statement of financial position (balance sheet) at 30 June 2017.
Total 1– 30 days 31–60 days 61–90 days Over 90 days 1,020,000 $480,000 $320,000 $160,000 $60,000 Percentage of uncollectible 0.5% 1.0% 4% 50%Explanation / Answer
Calculations:
a) Date General Journal Debit Credit Jul 14, 2016 Allowance for doubtful accounts 12800 Accounts receivable-Grace Wong 2800 Accounts receivable-Design Inc. 9600 Accounts receivable-SM Chung 400 (To record write off of uncollectible accounts) Nov 22, 2016 Allowance for doubtful accounts 16400 Accounts receivable-Tommy Chan 5200 Accounts receivable-Kathy Li 8400 Accounts receivable-Beta Group 2800 (To record write off of uncollectible accounts) Jun 30, 2017 Uncollectible account expense 49600 Allowance for doubtful accounts 49600 (To record uncollectible account expense)Related Questions
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