Aging of accounts receivable allowance method (Learning Objectives 4 & 5) 15–20 min.

Simpson Supply completed the following selected transactions during 2014:

Jan 17 Jun 29 Aug 6 Sep 4 Dec 31 Dec 31 Sold inventory to Jon Nelson, $800 on account. Ignore cost of goods sold.

Wrote off Jon Nelson’s account as uncollectible after repeated efforts to collect from him.

Received $650 from Jon Nelso, along with a letter stating his intention to pay within 30 days. Reinstated Nelson’s account in full.

Received the balance due from Jon Nelson.

Made a compound entry to write off the following accounts as uncollectible:

Bill Renz, $175; Nancy Carlson, $240; and Daria Putin, $137.

Based on an aging of accounts receivable, estimated uncollectible accounts as $3,180.

Requirements 1. Open T-accounts for Allowance for Uncollectible Accounts and Bad Debt Expense.

These accounts have beginning balances of $1,400 (cr.) and 0, respectively.

2. Record the transactions in the journal and post to the two T-accounts; remember to update account balances but ignore posting references.

3. The December 31 balance of Accounts Receivable is $87,550. Show how Accounts Receivable would be reported on the balance sheet at that date.

AppendixLO1