At September 30, 2014, the accounts of Park Terrace Medical Center (PTMC) include the following:

Accounts Receivable ............... $ 141,000

Allowance for Bad Debts (credit balance) .....3,400

During the last quarter of 2014, PTMC completed the following selected transactions:

Dec. 28 Wrote off accounts receivable as uncollectible: Red, Co., $ 1,600; Jacob Weiss, $ 1,300; and Star, Inc., $ 300

31 Recorded bad debts expense based on the aging of accounts receivable, as follows:

Requirements
1. Journalize the transactions.
2. Open the Allowance for Bad Debts T-account, and post entries affecting that account. Keep a running balance.
3. Show how Park Terrace Medical Center should report net accounts receivable on its December 31, 2014, balancesheet.

Transcribed Image Text:

Age of Accounts Accounts Receivable $161,000 Estimated percent uncollectible 1-30 Days 31-60 Days 61-90 Days Over 90 Days $5,000 25% $99,000 $42,000 15,000 0.2% 2% 2096