Answered: Ace Company uses the Aging of…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter14: Accounting For Uncollectible Accounts Receivable

Section: Chapter Questions

Problem 1AP

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Question

Ace Company uses the Aging of receivables method to account for uncollectible accounts. The company had the following balances on January 01, 2019. Accounts receivable $2,800,000 Allowance for uncollectible accounts $88,800 (credit) The company completed the following transactions during 2019. Wrote off the balance of $1,000 from Shari Wickham’s account as uncollectible on April 20 Re-instated the account of Louis Benn and recorded the collection of $1,500 as payment in full for her account which had been written off earlier on November 27 On December 31st, Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $124,500 of accounts receivable was estimated as uncollectible and made the closing entry for the uncollectible expense account. Requirements: 1. Prepare journal entries for each transaction (No narrations required) 2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account. 3. Prepare the balance sheet extract as at Dec 31, 2019, to show the net realizable value for the Accounts Receivable.

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