Acc205 Principles of Accounting: P8-27A At September 30, 2012, the accounts of Mountain Terrace

Acc205 Principles of Accounting

P8-27A Accounting for uncollectible accounts using the allowance method, and reporting receivables on the balance sheet
At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC) include the following:
Accounts receivable 145,000
Allowance for uncollectible accounts (credit balance) 3,500
During the last quarter of 2012, MTMC completed the following selected transactions: Dec 28 Wrote off accounts receivable as uncollectible: Regan, Co., $1,300; Owen Mac, $900; and Rain, Inc., $700
Dec 31 Recorded uncollectible account expense based on the aging of accounts receivable, as follows
Age of Accounts
Accounts Receivable 1-30 Days 31-60 Days 61-90 Days over 90 Days $165,000 97,000 37,000 14,000 17,000
Estimated percent uncollectible 0.3% 3.0% 30.0% 35.0%
Requirements
1. Journalize the transactions.
2. Open the Allowance for uncollectible accounts T-account, and post entries affecting that account. Keep a running balance.
3. Show how Mountain Terrace Medical Center should report net accounts receivable on its December 31, 2012 balance sheet. Use the three line reporting format.
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