On June 30, Paisley Party Planners had a $35,000 balance in Accounts Receivable and a $3,252 credit balance in Allowance for Uncollectible Accounts. During July, Paisley made credit sales of $198,000. July collections on account were $169,000, and write-offs of uncollectible receivables totaled $2,890. Uncollectible-accounts expense is estimated as 4% of credit sales. No sales returns are expected.
Requirements
1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during July. Explanations are not required.
2. Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Net Accounts Receivable at July 31. How much does Paisley expect to collect?
3. Show how Paisley Party Planners will report accounts receivable and net sales on its July 31 balance sheet and income statement for the month ended July 31.