Allowance method: reconstructing journal entry from events.

a. (From a problem by S.A. Zeff.) During Year 6, Pandora Company wrote off $2,200 of accounts receivable as uncollectible. During the year, the company re- ceived $800 cash from customers whose accounts it had previously written off as uncollectible. The balance in the Allowance for Uncollectibles began Year 6 at $3,500, and the balance at the end of the year, on the balance sheet after all ad- justing and closing entries, was $5,000. Present the journal entry that the company made to provide for uncollectibles during Year 6.

b. The balance sheets of Milton Corporation on December 31. Year 1 and Year 2. showed gross accounts receivable of $15,200,000 and $17,600,000, respectively. The balances in the Allowance for Uncollectible Accounts account at the begin- ning and end of Year 2. after closing entries, were credits of $1.400.000 and $1,550,000, respectively. The income statement for Year 2 shows that the expense for estimated uncollectible accounts was $750,000, which was 1 percent of sales. The firm makes all sales on account. There were no recoveries during Year 2 of accounts written off in previous years. Give all the journal entries made during Year 2 that have an effect on Accounts Receivable and Allowance for Uncol- lectible Accounts.

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