Guiltier Corporation_uncollectible accounts

$11.00

Description

Guiltier Corporation uses allowance method to accounts uncollectible
accounts receivables. Credit terms for sales is n30 (net is due at 30 days).

Below is the company’s uncollectible policy:

·
Monthly provision for uncollectible
accounts is 2% of credit sales.

·
Write-off of bad debts is debited to
allowance for uncollectible accounts.

·
If bad debt is recovered after being
written off, the amount is credited to allowance for uncollectible accounts.

Below is information about credit sales, bad debt and uncollectible
accounts. All accounts are shown in thousands.

·
January 1, 2013, balance in allowance
for uncollectible accounts was $130.

·
Credit sales for the year was $9,000.

·
As per policy, monthly provision for
uncollectible accounts is 2% of credit sales was made throughout the year.

·
Write-off of bad debts was $90.

·
Recoveries of accounts previously
written off was $15.

Aging Reports of accounts receivable based on months of sales is below.
This was prepared on December 30, 2013 (the last day of sale for the year). All
accounts are shown in thousands.

Description Balance Estimated
% Uncollectible

11/1/13-12/30/13 $1,080 2%

7/1/13 – 10/31/13 650 10%

1/1/2013-6/30/2013 420 25%

12/31/2012 150 80%

Total $2,300

On December 31, 2013, Guiltier Corporation’s accountant wrote off $60
from the 12/31/2012 accounts receivable balance. The estimated percentage
uncollectible is applicable to the remaining balance after the write off.

Required:

a. Prepare a schedule as of December 31, 2013 showing the balance in the
allowance for uncollectible accounts. Remember to include the write off on this
date as described above.

b. Prepare journal-entry for the adjustment
to allowance for uncollectible accounts on December 31, 2013.

c. Show how accounts receivables will be shown on Guiltier Corporation’s
balance sheet on December 31, 2013.

Reviews

There are no reviews yet.

Be the first to review “Guiltier Corporation_uncollectible accounts”

Your email address will not be published. Required fields are marked *