The June 30, 20X 7, balance sheet of Texas Golf Carts reports the following: Accounts receivable…………………………………. $143,000 Allowance for Uncollectible Accounts (Cr)………… 3,200 At the end of each quarter, Texas Gulf Carts estimates uncollectible account expense to be 1½% of credit sales. At the end of the year, the company ages its accounts receivable and adjusts the balance in the Allowance for Uncollectible Accounts to correspond to the aging schedule. During July to December of 20X7, Texas Gulf Carts completed the following transactions: August 9 Made a compound entry to write off uncollectible accounts: J. Aguilar, $200; Seaton Co., $100; and T. Taylor, $700. Sept. 30 Recorded uncollectible account expense equal to 1½% of credit sales of $140,000 Oct. 18 Wrote off accounts receivable as uncollectible the $500 account receivable from Lantz Co. and the $400 account receivable from Navisor Corp. Dec. 31 Recorded uncollectible-account expense based on the aging of receivables, which follows:                                                                            Age of Accounts (in Days) Total                                                      1-30           31–60        61–90         Over90   $163,000                                           $100,000     $40,000      $14,000       9,000 Estimated percent uncollectible       0.1%             0.5%              5%             30% Required: Record the transactions in the journal. Open the Allowance for Uncollectible Account and post entries affecting that account. Keep a running balance. Show how Texas Gulf Carts should report accounts receivable on its balance sheet at December 31, 20X7

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...
icon
Related questions
Question
100%

The June 30, 20X 7, balance sheet of Texas Golf Carts reports the following:

Accounts receivable…………………………………. $143,000

Allowance for Uncollectible Accounts (Cr)………… 3,200

At the end of each quarter, Texas Gulf Carts estimates uncollectible account expense to be 1½% of credit sales. At the end of the year, the company ages its accounts receivable and adjusts the balance in the Allowance for Uncollectible Accounts to correspond to the aging schedule. During July to December of 20X7, Texas Gulf Carts completed the following transactions:

August 9 Made a compound entry to write off uncollectible

accounts: J. Aguilar, $200; Seaton Co., $100; and T.

Taylor, $700.

Sept. 30 Recorded uncollectible account expense equal to 1½% of credit

sales of $140,000

Oct. 18 Wrote off accounts receivable as uncollectible the $500 account

receivable from Lantz Co. and the $400 account receivable from

Navisor Corp.

Dec. 31 Recorded uncollectible-account expense based on the aging of

receivables, which follows:

                                                                           Age of Accounts (in Days)

Total                                                      1-30           31–60        61–90         Over90  

$163,000                                           $100,000     $40,000      $14,000       9,000

Estimated percent uncollectible       0.1%             0.5%              5%             30%

Required:

  1. Record the transactions in the journal.
  2. Open the Allowance for Uncollectible Account and post entries affecting that account. Keep a running balance.
  1. Show how Texas Gulf Carts should report accounts receivable on its balance sheet at December 31, 20X7
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
Recommended textbooks for you
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning