(Learning Objectives 4, 5: Account for accounts receivable and uncollectibleaccounts) Perform the following accounting for the receivables of Hawkins and Harris, a CPAfirm, at December 31, 2018.Requirements1. Set up T-accounts and start with the beginning balances for these T-accounts:■ Accounts Receivable, $104,000■ Allowance for Uncollectible Accounts, $12,000Post the following 2018 transactions to the T-accounts:a. Service revenue of $695,000, all on accountb. Collections on account, $720,000c. Write-offs of uncollectible accounts, $8,000d. Uncollectible-account expense (allowance method), $15,0002. What are the ending balances of Accounts Receivable and Allowance for UncollectibleAccounts?3. Show how Hawkins and Harris will report accounts receivable on its balance sheet atDecember 31, 2018.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
(Learning Objectives 4, 5: Account for
accounts) Perform the following accounting for the receivables of Hawkins and Harris, a CPA
firm, at December 31, 2018.
Requirements
1. Set up T-accounts and start with the beginning balances for these T-accounts:
■ Accounts Receivable, $104,000
■ Allowance for Uncollectible Accounts, $12,000
Post the following 2018 transactions to the T-accounts:
a. Service revenue of $695,000, all on account
b. Collections on account, $720,000
c. Write-offs of uncollectible accounts, $8,000
d. Uncollectible-account expense (allowance method), $15,000
2. What are the ending balances of Accounts Receivable and Allowance for Uncollectible
Accounts?
3. Show how Hawkins and Harris will report accounts receivable on its balance sheet at
December 31, 2018.
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